CEC Africa’s woes are poised to continue as the company reports another half-year of weak financial performance from their Nigerian operations.
“In accordance with Section 3.4(b) of the Lusaka Securities Exchange Listings Requirements the Board of Directors of CEC Africa Investments Limited hereby advises the Shareholders of the Company that the Earnings Per Share for the six-month period ended 30 June 2019 was (0.98) kwacha which was a decline of approximately 56% compared to the six-month period ended 30 June 2018”, according to Mauritius International Trust Company Limited, the designated company secretary based in Mauritius issued in Lusaka on 19th September 2019.
The company attributed the fall in EPS due to two main reasons: Increase in gross loss as a result of tariff shortfalls and also an increase in net finance costs and the depreciation of the Kwacha.
The Nigerian energy sector has not been without its challenges. This has made the Siyanga malumo (Chairman CEC Africa) led expedition to seek out “Niara value” all the more difficult. “The lack of cost-reflective tariffs is discouraging investments in the ailing Nigerian electricity sector“, according to Azura Power a company involved in power generation and was the first privately financed power plant in the Edo state according to allafrica.com.
Furthermore, Power sector corruption has lost Nigeria 11 trillion Naira since 1999 according to a report published by the Centre for Health, Equity and Justice (CEHEJ) titled “Kept in Darkness”.
The macro challenges the company continues to face in Nigeria led to their decision to signal intent to dispose of its distribution asset, Abuja Electricity Distribution Company Plc, earlier in 2019.
The World Bank is on record in its attempt to help the country towards financial stability in the electricity sector. In 2018, they launched a program, Power Sector Recovery Performance-Based Loan, whose objectives were to improve the reliability of electricity supply and enhance power sector financial viability and governance.