STOCKS TO WATCH: Capital Hotel’s new path, Airtel Nigeria’s slow revenue and Geregu’s decline after IPO

Stocks to watch this week are Capital Hotel, Airtel Africa, and Geregu, as the Nigerian stock exchange resumes another trading session this week.

Ripples Nigeria stocks watchlist is a selection of stocks monitored for viable trading or investing opportunities. An investor may casually generate a list of equities for investment purposes. But we have taken the pain to do that based on certain parameters in order to save you that hassle.

Kindly note that Ripples Nigeria Stocks Watchlist is not a buy, sell or hold recommendation. It is advisable to consult your financial advisor before making any investment decision.

Capital Hotel

Capital Hotel has began restrategising following 22 Hospitality Limited’s majority acquisition in the hospitality business.

The company renamed Sheraton Abuja Hotel to Abuja Continental Hotel, indicating it is shedding itself from the bad headlines that have trialed the Sheraton Abuja Hotel brand.

Recall that Sheraton Abuja Hotel has been in the midst of faceoff between Capital Hotel and Marriott International, the manager of the hospitality firm.

Also, the Abuja Environmental Protection Board (AEPD) and the Federal Capital Territory (FCT) Fire Services had threatened to shut down Sheraton Abuja Hotel due to some breaches detected in the building.

As a result, the hotel was temporarily locked down, resulting to revenue loss. However, last week, the hotel reopened and was renamed.

This move is expected to boost the capital market’s confidence in the growth prospect of Capital Hotel, thereby, attracting more investors and increasing shareholders’ investment value.

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Airtel Africa

Airtel Africa has reported that the company’s revenue recorded a slow growth in its largest market, Nigeria, last year.

The telecommunications company saw its revenue in Nigeria grow by 20.9 per cent in 2022, which is below the 29 per cent growth recorded the previous year.

This shows that the significant usage recorded during the COVID-19 period in 2020 and 2021 is wearing off, as historical inflation reported in Nigeria last year is affecting consumer spending.

While the growth in 2022 is still enough to maintain the capital market’s confidence this year, the slow growth between 2021 and 2022 cast doubt on the company recovering its COVID period performance.

Geregu

During the same year the company went public through an Initial Public Offering (IPO), Geregu suffered a significant decline in earnings in 2022.

The power plant’s revenue dropped by -32.8 per cent year-on-year from N70.95 billion generated in 2021 to N47.61 billion in 2022.

This was the lowest revenue in three years, and Ripples Nigeria gathered that the management couldn’t surpass 2021 turnover due to a nationwide force majeure (FM) declared by Shell Petroleum Development Company Limited (SPDCL).

With N23.33 billion drop in revenue, such report could harm investors’ confidence, however, with Shell Petroleum back to supplying gas, Geregu expects its revenue will bounce back.

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