MRS Oil Nigeria Plc has announced plans to voluntarily delist its shares from the Nigerian Exchange Limited (NGX) following a strong financial performance in 2024.

The decision, which was approved by shareholders at an Extraordinary General Meeting (EGM) held on June 25, 2024, comes at a time when the Nigerian stock market is experiencing renewed momentum, with the All-Share Index (ASI) recording steady gains.

The company reported a significant 71.2% increase in revenue, reaching N312.2 billion, and a profit after tax of N6.49 billion, marking a 62.2% year-on-year growth. These robust results reflect MRS Oil’s strong market positioning, particularly following its strategic purchase of refined products from the Dangote Refinery, which has attracted fuel-efficiency-conscious customers.

Despite these positive financial outcomes, MRS Oil cited several reasons for its decision to exit the NGX, including the rising costs of maintaining a public listing, the need for greater operational flexibility, and the challenges posed by the full deregulation of Premium Motor Spirit (PMS). The company acknowledged that while the recent deregulation has led to higher fuel prices and lower sales volume, overall revenue growth has remained strong enough to offset these declines.

Following its delisting, MRS Oil plans to migrate its shares to the NASD OTC Securities Exchange, a platform that facilitates the trading of unlisted securities. This will allow existing investors to continue trading their shares while enabling the company to focus on long-term growth without the regulatory burdens of a public listing.

Share Buyback and Capital Reduction for Shareholders

As part of the delisting process, MRS Oil will initiate a share buyback and share capital reduction program, aimed at providing an exit opportunity for dissenting shareholders who do not wish to remain invested after the delisting. The company has set aside the necessary funds to compensate these shareholders, with the claim period running from April 4 to July 4, 2025. Shareholders who do not opt for the buyout within this window will have their shares automatically migrated to the NASD OTC Exchange.

MRS Oil has assured investors that the entire delisting process will comply with all necessary regulatory approvals from the Securities and Exchange Commission (SEC) and the NGX. The company also emphasized that this strategic move will allow it to streamline operations and focus on long-term growth strategies without the restrictions associated with being a publicly listed company.

Part of a Broader Market Trend of Corporate Exits

MRS Oil’s exit follows a growing trend of companies delisting from the NGX in recent years, citing similar challenges such as high compliance costs, low trading liquidity, and macroeconomic instability. Notable exits include GlaxoSmithKline (GSK) Consumer Nigeria Plc, which delisted in 2023 due to strategic business reviews and operational constraints; 11 Plc (formerly Mobil Oil Nigeria), which left the NGX in 2021 and transitioned to the NASD OTC Securities Exchange; and Union Diagnostics, which also delisted, opting for private ownership.

Before its announcement, MRS Oil had a market capitalization of approximately N59 billion, contributing to the overall NGX market size of N63 trillion. Its departure further underscores wider concerns about the NGX’s ability to retain listings, particularly from mid-sized and multinational companies facing operational challenges in Nigeria’s economic landscape.

Analysts have warned that the steady stream of corporate exits reflects deeper structural problems within the Nigerian capital market, which may require urgent reforms to improve investor confidence and retain listings.

Delisting Comes Amid Market Gains

MRS Oil’s decision to delist coincides with a rally in the Nigerian stock market, with the All-Share Index (ASI) recording an increase of 244.24 points on March 28, 2025, closing at 105,670.36 points. This represents a 0.23% increase from the previous day’s figure of 105,426.12 points. The market capitalization also grew to N66.2 trillion, up from N66.1 trillion the previous day, reflecting increased investor activity. Daily trading volume surged to 544 million shares, compared to 423.6 million shares recorded the previous day, signaling renewed investor confidence.

Among the biggest gainers were UPDC and ABBEYBDS, each soaring by 10 percent, while INTENEGINS and AFRIPRUD led the losers’ chart with 10 percent declines.

UPDC saw its price rise to N2.97, while ABBEYBDS closed at N4.73. NNFM also recorded a strong gain of 9.96 percent, ending the day at N87.75. MBENEFIT followed with a 9.38 percent increase, reaching N1.05, while ROYALEX advanced by 8.25 percent to close at N1.05.

On the losing side, INTENEGINS fell to N1.62, and AFRIPRUD dropped to N13.05. CADBURY recorded a 9.42 percent loss, closing at N23.55, while UPDCREIT declined by 9.09 percent to N5.50. RTBRISCOE also saw a decline of 7.69 percent, ending at N2.40.

Trading volume remained high, with MBENEFIT leading at 73.9 million shares, followed by CUTIX with 72 million shares. GTCO recorded 67.8 million shares, while FIDELITYBK saw 47.5 million shares exchanged. UNIVINSURE also recorded significant activity, with 33 million shares traded.

In terms of value, ARADEL led the market with transactions worth N6.4 billion, followed by GTCO with N4.5 billion. NESTLE and GEREGU facilitated trades worth N2.3 billion and N2.2 billion, respectively, while ZENITHBANK recorded N1.1 billion in transactions.

Market Outlook: ASI Pushes Towards 106,000 Points

The Nigerian All-Share Index (ASI) is attempting to break past the 106,000 mark, as market sentiment shows signs of renewed optimism following weeks of corrections. Analysts note that this market rebound could provide opportunities for investors to enter at more favorable price levels.

However, despite the gains in the broader market, MRS Oil’s delisting underscores lingering concerns about the NGX’s ability to retain companies. With ongoing economic challenges such as foreign exchange volatility, inflation, and high operational costs, businesses may continue to rethink the benefits of maintaining public listings.

While MRS Oil has assured shareholders that it will provide updates throughout the delisting process, the pattern of corporate exits suggests deeper structural issues that may require urgent reforms to restore investor confidence in the Nigerian capital market.

Jim Ovia, the chairman and founder of Zenith Bank, and Tony Elumelu, the Chairman of UBA, are set to receive a staggering N25.4 billion and N12.71 billion dividend payout respectively for the 2024 financial year, an outcome of their banks’ record-breaking performance.

The Zenith payout, scheduled for April 15, 2025, follows a year in which the bank delivered an exceptional profit after tax of N1.03 trillion, a significant 52.5% increase from the N676.9 billion reported in the previous year.

The financial statements for the year ended December 31, 2024, reveal that the Board of Directors has proposed a final dividend of N4.00 per share. This, when combined with the N1.00 interim dividend per share paid earlier in the year, brings the total dividend payout to N5.00 per share.

For Ovia, whose direct shareholding stands at 3,552,949,395 shares and indirect holding at 1,529,851,344 shares, the total shareholding of 5,082,800,739 shares translates to a windfall of N25,414,003,695.

The increased dividend payout reflects the bank’s strong earnings performance, which saw gross earnings rise to N3.9 trillion, a sharp increase from N2.39 trillion in the previous year. A significant driver of this revenue boost was interest income, which more than doubled to N2.7 trillion, compared to N1.14 trillion in 2023.

The high-interest-rate environment in Nigeria, fueled by the Central Bank of Nigeria’s (CBN) aggressive monetary policy stance, has allowed tier-one banks like Zenith to capitalize on rising yields on government securities while expanding their loan books.

Zenith Bank’s net interest income climbed to N1.73 trillion, supported by strong earnings from loans and advances as well as strategic investments in low-risk government securities such as treasury bills. The bulk of the bank’s revenue came from its Nigerian operations, which generated N3.5 trillion out of the total N3.97 trillion in net consolidated revenue.

Meanwhile, its African and European operations recorded a revenue increase to N510 billion, up from N281.1 billion in the prior year, demonstrating the bank’s growing international footprint.

Tony Elumelu to Receive N12.71 Billion Dividend from UBA

Meanwhile, another prominent name in Nigeria’s financial sector, billionaire investor Tony Elumelu, is also set to receive a significant dividend payout of N12.71 billion from United Bank for Africa (UBA) following the bank’s robust financial performance in 2024.

Elumelu, who serves as Chairman of UBA, owns a total of 2,542,511,824 shares in the bank, spread across both direct and indirect holdings. His direct shareholding stands at 195,124,581 shares, while his indirect holdings are spread across three investment entities: HH Capital Limited, Heirs Holdings Limited, and Heirs Alliance Limited. The sheer size of his holdings secures him one of the highest individual dividend earnings from UBA’s latest financial results.

UBA declared a total dividend of N5.00 per share, marking a significant increase from the previous year. The final dividend of N3.00 per share, combined with an interim dividend of N2.00 per share, resulted in a total payout ratio of 26.6%, a significant jump from the 16.32% recorded in 2023. Consequently, UBA’s total dividend payout surged to N147.05 billion, compared to N47.88 billion in the prior year, reflecting the bank’s record-breaking financial performance.

The bank reported a pre-tax profit of N803.7 billion, a 6% increase from N757.6 billion in 2023. After-tax profit climbed by 26.14% to N766.5 billion, marking the highest annual profit in the bank’s history. UBA also recorded substantial growth in key financial metrics, with gross earnings surging by 53.6% to N3.19 trillion, up from N2.08 trillion in 2023.

UBA, one of Nigeria’s five largest banks, known as FUGAZ (FirstHoldCo, UBA, GTCO, Access Holdings, and Zenith Bank), also witnessed a remarkable expansion in total assets, which grew to N30.3 trillion, an increase of N9.7 trillion from the N20.65 trillion reported in the previous year. The bank’s 2024 full-year results were highly anticipated by investors, especially amid a declining stock market.

Over the last two years, UBA has posted a cumulative profit of N1.37 trillion, a striking contrast to the N570.4 billion recorded over the preceding five-year period. This rapid growth highlights the bank’s improved operational efficiency and strategic execution. Despite economic challenges, UBA has managed to maintain strong performance, driven by its pan-African presence and an expanding balance sheet.

For Elumelu, this dividend payout reinforces his deep investment in UBA’s success, a testament to his role in driving the bank’s expansion across Africa and beyond.

The performances of both Zenith Bank and UBA highlight a booming Nigerian banking sector, one that is thriving despite economic headwinds. With record profits, increasing revenues, and substantial dividend payouts, these banks continue to solidify their positions as leading financial institutions in Africa.

The high-interest-rate environment, fueled by the CBN’s stringent monetary policy, has proven beneficial for banks, driving interest income growth and strong financial performance. Analysts anticipate that, with inflationary pressures persisting, tier-one banks like Zenith and UBA will continue to enjoy elevated earnings, even as economic uncertainty remains a concern.

The record payouts to Jim Ovia and Tony Elumelu demonstrate the massive wealth accumulation among Nigeria’s top banking executives, reinforcing their financial status as key players shaping the country’s financial sector.

The Nigeria Economic Summit Group (NESG) has urged the Federal Government to maintain crude oil production at 2.2 million barrels per day (bpd), emphasizing that this is crucial for ensuring the viability of the 2025 budget and stabilizing the country’s economy.

Dr. Tayo Aduloju, the Chief Executive Officer of NESG, made this recommendation during the group’s media briefing on its 2025 strategic vision and private sector macroeconomic outlook in Abuja. According to him, achieving this production level is not just a revenue target but a necessary condition for foreign exchange stability and overall economic growth.

Aduloju pointed out that Nigeria’s oil production has fluctuated significantly in recent years, ranging between 1.1 million bpd, 2.2 million bpd, and a peak of 2.8 million bpd. He stressed that despite these variations, the 2.2 million bpd target remains realistic, given the current administration’s commitment to increasing output.

“Hitting 2.2 million bpd crude production, regardless of the crude oil price, is necessary for the budget to be realistic,” Aduloju said. “The government has shown since it came into office that crude production moved from 1.1 million bpd to 2.2 million bpd, and even to 2.8 million bpd.”

His statement aligns with the NESG’s latest report, “The Arc of the Possible,” which outlines specific short- and medium-term strategies for Nigeria’s economic transformation. The report details how a stable and robust crude oil production strategy can provide the financial foundation necessary for critical policy implementation.

NESG’s Call Comes Amid Oil Price Rally Fueled by Geopolitical Tensions

The NESG’s demand for increased oil production comes at a time when global crude prices are on the rise, driven largely by geopolitical conflicts and shifting U.S. sanctions that have heightened concerns over supply disruptions.

As of 0949 GMT, Brent crude was trading at $74.11 per barrel, extending an eight-day winning streak—the longest since May 2022. Similarly, U.S. West Texas Intermediate (WTI) crude rose slightly to $69.97 per barrel. Both benchmarks have gained approximately 2.5% this week and are up 7% from multi-month lows recorded in early March.

Market analysts attribute this rally to increasing U.S. sanctions on Venezuela and Iran, two major oil-producing nations. The United States has imposed fresh restrictions on Venezuelan crude exports, making it more difficult for the South American country to sell its oil on the global market. Additionally, new sanctions on China’s crude imports from Iran have created uncertainty, further tightening the oil supply.

June Goh, a senior oil analyst at Sparta Commodities, explained that these developments have contributed to an apparent shortage of crude oil in the market.

“The potential loss of Venezuelan crude exports to the market due to secondary tariffs and the possibility of similar restrictions on Iranian barrels has created an apparent tightness in crude supply,” she told Reuters.

The United States has imposed a 25% tariff on potential buyers of Venezuelan crude, adding further restrictions to Venezuela’s ability to trade. At the same time, trade of Venezuelan oil to China, its largest buyer, has stalled, as reported by Reuters. India’s Reliance Industries, which operates the world’s largest refining complex, is now set to halt Venezuelan oil imports, according to sources familiar with the matter.

The combined effect of these sanctions has led to concerns over global supply constraints, pushing oil prices higher. While these rising prices benefit oil-producing nations like Nigeria, they also present challenges, particularly in terms of domestic inflation and fuel pricing.

Nigeria’s Economic Prospects Under Higher Oil Prices

For Nigeria, a sustained oil price rally could provide much-needed revenue, particularly as crude oil earnings remain a key component of the country’s budget framework. In February 2025, President Bola Tinubu signed the N54.99 trillion 2025 appropriation bill into law. This represents a 99.96% increase from the N27.5 trillion budget of 2024 and was passed by the National Assembly on February 13 after undergoing several revisions.

The government has set a $75 per barrel benchmark price for crude oil in the 2025 budget. With Brent crude currently trading at around $74.11 per barrel, the price is nearing Nigeria’s official projection. If the upward trend continues, Nigeria’s revenue targets could be met or even exceeded.

However, Aduloju warned that reaching the 2.2 million bpd production target will require political stability and security in oil-producing regions. He pointed to recent political tensions in Rivers State, a major oil-producing area, as a potential risk factor that could disrupt production.

NESG Report Projects Stronger Economic Growth in 2025

The NESG’s macroeconomic outlook report, “Stabilization in Transition: Rethinking Reform Strategies for 2025 and Beyond,” presents a positive economic forecast if Nigeria implements the right policies. It projects that effective economic reforms could push Nigeria’s GDP growth to 5.5% in 2025, with inflation declining to 24.7% under optimal conditions.

Several factors are expected to drive this growth, including improvements in power supply and fuel availability, which will reduce operational costs for businesses, particularly Nano, Micro, Small, and Medium Enterprises (NMSMEs). Increased foreign exchange liquidity is also expected to provide relief for manufacturers who rely on imported raw materials.

The report further highlights agricultural sector reforms as a critical growth driver, addressing issues related to financing, storage, and logistics. Additionally, it emphasizes the need for enhanced security in farming regions, which would lead to increased food production and ease inflationary pressures.

Aduloju stressed that achieving these targets will require strong coordination between fiscal and monetary authorities, urging the government to align its economic policies to ensure smooth implementation.

Oil Market Uncertainty and Its Implications for Nigeria

While the rise in crude prices presents an opportunity for increased revenue, it also introduces economic risks. Higher oil prices tend to push up fuel costs, and in Nigeria, changes in domestic pump prices have historically been linked to fluctuations in global crude markets.

U.S. crude inventory data released by the Energy Information Administration (EIA) showed that U.S. crude stockpiles fell by 3.3 million barrels last week, far exceeding analysts’ expectations of a 956,000-barrel decline. This reduction in U.S. supply has provided further support for global crude prices.

However, the long-term sustainability of current price levels remains uncertain, given ongoing geopolitical tensions, trade conflicts, and global economic instability. Analysts at BMI maintain their 2025 forecast for Brent crude at $76 per barrel, down from an average of $80 per barrel in 2024, citing uncertainties in the oil market.