Sailing through Storms, Repositioning for Opportunities
Dear co-operators,
I am delighted and honoured to address this great family of resilient investors and cooperators. I believe this is an auspicious time to remind us of the vision of our great society to be an innovative business entity, always seeking opportunities for profitable growth while demonstrating that a staff cooperative society can bring genuine benefits to its members, her associates and the local communities of operation.
This vision is now more apt than ever before. As one of the founding members, I can share that one of the reasons our society did not take her name from any of our parent companies was the vision and aspiration that our society will outlive our employers. That aspiration is today an emerging reality.
According to the Holy Bible, “there is a season to everything and a time to every purpose under heaven”. The year 2023 can be considered our season of storms as individuals and as a cooperative society. We are still going through the storms, but we are sailing through gloriously by the help and mercy of God Most High.
Through the various international, national, and corporate storms that we experienced in 2023 and still sailing through in 2024 , I am glad to let you know that Group Resources has remained profitable and reliable under the team of Executive Committee Members which you gave your mandate to.
The Operating Environment
The year 2023 experienced a few government policies that put severe pressure on the populace among which are the Naira redesign, subsidy removal, and the floating of the Naira. The intense electioneering activities which began in 2022 culminated in the emergence of President Bola Ahmed Tinubu in 2023.
The floating of the Naira resulted in the depreciation of the Naira by more than 40% beginning with about N700 to $1 in January 2023 and crossing the N1000 to $1 mark for the first time in December 2023.
Inflation rose from 18.8% in 2022 to 24.5% in 2023, due to rising fuel costs and a depreciating Naira.
Monetary policy was tightened to control inflation, with the policy rate increasing from 17.5% in January 2023 to 18.75% in December 2023. Petrol prices increased 164%, from N254 per Litre in May 2023 to N671 in December 2023.
The Nigeria economy continues to slow down from 3.3% in 2022 to 2.9% in 2023 due to high inflation, tight monetary policies, as well as the sluggish growth in the global economy, which declined from 3.5% in 2022 to 3.2%, unstable international politics, rising cost of energy, terrorism in 2023. The poverty level in Nigeria remained high, with multidimensional poverty at 63% and income poverty at 40%.
Internally, the Nigerian Agip Oil Company (NAOC), one of the employer companies where most of the members of our society are engaged was acquired by OandO in a transaction which was announced on 4th of September 2023 and concluded on the 22nd of August 2024.
The Impact
The society witnessed an upsurge in members resorting to the Society for loans in unprecedented proportions to deal with the economic and social pressures that the operating climate put on us all. Furthermore, the process of the acquisition of NAOC created a panic situation which put the Society on the edge. The society had to prepare for the worst case of a mass withdrawal of members or even winding down of the Society’s activities as the implication of the acquisition was hazy, unsettling and members were requesting to exit the Society and some actually did exit while others were demanding to know their exposures to the society in case they too needed to exit.
We believe that the year 2023 was a stress test for the society. We also believe that it also provided an opportunity for us to appreciate the availability of a vehicle like the cooperative society in these times we are in, a vehicle that has enabled us to weather these storms and come out stronger.
The fact that we are still here today is a strong proof that the society is largely comprised of members with high resilience, a long-term vision and progressive minded set of individuals who are prepared to weather all kinds of storms and convert risks into opportunities. Kudos, I say to you all for holding on and believing in this dream.
Through the Storms – Our Achievements
The late sage, Chief Obafemi Awolowo, quoting from Hugh Walpole’s novel entitled “Fortitude” at the end of his landmark trial in court for treason, said: “It is not the life that matters but the courage you bring to it.”. We faced the year 2023 with all its attendant challenges with courage and took bold and proactive steps that positioned us to take advantage of the storms to our profiting as we present them today.
1. Profitability
Our shareholders fund grew by 35%, while Members Contribution grew by 34%. We generated an increase of 32% in our gross profits largely driven by earnings from Loan Interest Income as well as Real Estate Investments which accounted for 52% and 45% of our gross earnings respectively when compared with the previous year, both accounting for 97% of our operating profits.
Our Net Operating Profit grew by 46% and our Earnings Per Share maintained an increase of 29% when compared with 2022 performance with a membership strength that grew by 20% to 121 active members in 2023. We however closed with 112 members, after the exit of 10 members, a 7% net decline in membership as at 31st December 2023.
2. High Contributors Loan
The Society structured a loan product to enable members with contribution balances, that is, contribution balances above 10 Million Naira, to access loans to the tune of 200% of their contributions with flexible repayment options and up to four years repayment plans that mirrors what is obtainable in the commercial banking sector while moderating the impact of the repayment of the loans on the monthly income of the members.
This High Contributors Loan within a short period of time has accounted for about 34% of the earnings of the society on Loan Interest Income and 18% of our Gross Income.
3. Asset Acquisition Loan: Solar Energy Inverter Product
In response to the rising cost of electrical energy, the society launched the Solar Inverter Acquisition Scheme in partnership with Solarcity Engineering Nigeria Limited to enable our members the use of alternate, clean, and renewable energy to moderate the cost of their energy consumption as well have access to power at a lower cost when the grid goes down. This product also contributed 3% to our Interest Income earnings.
4. Cloud Infrastructure
We successfully migrated our IT infrastructure to the cloud, enabling us to operate from anywhere without depending on any of our employer’s infrastructure.
5. FundCustomer Portal
We also launched the membership accounting portal, named Fundcustomer, where our members can log on to their accounts and have access to their financial information and other cooperative activities.
Dividend
Upon approval by you, the great members of this Cooperative Society at this AGM and in line with the provisions of the law guiding our operations, we hereby propose to pay out the sum of NGN50,904,696 which stands at credit of the general reserves.
Evolution
We started in 2013 with members drawn from one company, namely NA CPFA, a subsidiary of Nigerian Agip Oil Company (NAOC). We later drew in members from the three companies under the same Eni shareholder, namely, NAOC, Nigerian Agip Exploration (NAE) and Agip Energy and Natural Resources (AENR).
Today, we have members from drawn across two companies with two different shareholders, namely Eni for NAE and OandO for OandO Energy Resources Nigeria Limited (OERNL).
Change is constant and natural; evolution however must be intentional and strategic if a specie is to survive and thrive. These structural changes in the shareholdings of our parent companies no doubt have thrown up some concerns about our future operations. It will, however, be our collective decision to work with what life has given us and keep making progress evolving structures and governance frameworks that will protect, preserve and promote the value of our resources, assets, and investments in our journey to create greater value for ourselves, our associates and our local communities and the world at large.
Outlook
- Foreign Currency Denominated Investments
- Group Resources Owned Real Estate
- Investments in the Real Sector Election of New Executives
Closing
In the constant sayings of Ms. Ighojovbe Oghenekaro, the former General Manager, Human Resources and Organization of NAOC, now General Manager, Integration of OERNL, “when life gives you lemons, make lemonades”. I want to urge and encourage us all to continue this profitable and enjoyable journey, turning risks to opportunities, benefiting from ups and downs as we keep setting the sail and blazing the trail as worthy pathfinders and investors.
Thank you for your time and attention.
Thank you for the opportunity to serve you.
Thank you for the support and encouragement as well as criticisms.
Thank you for the bond of fellowship as co-operators.
God bless Group Resources Management Cooperative Multipurpose Society!
God bless the OandO Energy Resources Nigeria Limited.
God bless the Nigerian Agip Exploration!
God bless the Lagos State Ministry of Commerce and Cooperatives!
God bless Nigeria.
Yours in service
Bolofinde, Emmanuel MNI
President
Group Resources Management Cooperative Multipurpose Society