Nigeria Content Online

First Bank of
Nigeria Plc, suffering from huge post-audit losses like every other
bank in the country, refines growth strategy for the current fiscal
year.

First Bank in its
financial report for the nine month period ended December 31, 2009, in
line with the common year end required by the Central Bank of Nigeria,
reports 29 percent increase in gross earnings and 15 percent increase
in operating income.

However, profit before and after tax nose-dived deeply by 72.64 percent and 90.5 percent respectively.

Nonetheless, the
bank appears to be already making up for the losses as its first
quarter 2010 results recorded a 62 percent quarter on quarter increase
in profit, before tax and capital adequacy of 16.6 percent.

Although gross
earnings stood at N62.4 billion for the three months ended March 3,
2010, showing a year on year decrease of 10.6 percent, from N69.8
billion in March 31, 2009, profit before tax was put at N15.4 billion,
following a loss of N9.8 billion in March 2009. However, this is an
increase of 62.1 percent quarter on quarter (N9.5 billion December
2009).

On the other hand, shareholders’ funds stood at N310 billion, a decrease of eight percent from N337 billion in March 2009.

Stephen Olabisi
Onasanya, Group Managing Director of First Bank, while commenting on
the year end results, in a statement made available to NEXT, said: “We
have also refined our strategy based on four strategic themes and
priorities: growth via the diversification of assets and revenue
streams; service excellence by developing world class processes,
systems and capabilities; performance management to create a culture of
individual accountability at all levels; and developing talent with a
view to becoming the hub for the best talent in the industry.”

Financial highlights

The group’s
financial highlights show gross earnings of N196.4 billion during the
period in review, or an increase of 29 percent compared with N152.5
billion recorded in the corresponding period of 2008.

Operating income
was put at N130.5 billion (N113.2 billion December 2008), an increase
of 15.3 percent; profit before tax of N11.6 billion (N42.4 billion
December 2008), 72.64 percent fall impacted by an increase in
provisions for loan-losses post CBN-audit.

Profit after tax
stood at N3.2 billion (N33.9 billion December 2008), representing over
90.5 percent decrease, while shareholders’ funds fell to N310 billion,
a decrease of six percent from N331 billion year on year.

Also, full and
conservative provision against loans and advances rose to N40.6
billion, as at December 31 2009, compared to N18.9 billion a year ago.
Loan-to-deposit ratio fell to 81 percent, down from 84 percent during
the period in review, while non-performing loan ratio rose to 8.2
percent from 2.1 percent in December 2008. Also, cost/income ratio rose
to 60 percent, up from 56.4 percent in December 2008.

Basic earnings per share was put at 10.99 kobo for the nine month period, compared to N1.36 as at December end 2008.

Speaking on the
result, Mr. Onasanya said, “As highlighted in our results, 2009 has
been a tough year for the Nigerian banking sector as a whole and this
is reflected in our performance. We have also made full provisions in
compliance with the CBN requirement and I am pleased to say that our
operating performance and financial stability remain solid, with
operating income up 15.3 percent, against the prior year period and a
risk weighted capital adequacy ratio (CAR) of 15.8 percent, well in
excess of the regulatory minimum.”

Strategic Themes

Despite the huge
losses, Alex Otti, Executive Director, South, noted that total deposits
for the Group continued to grow over the period, albeit at a slower
pace. “However, since the year end, there has been a flood of liquidity
into the system, which has brought fixed income yields to record lows,
dragging deposit rates down with them, and potentially lending rates as
well, albeit at a much slower rate.” However, the bank is anticipating
a pick-up in mergers and acquisition activities, in the banking sector
with further growth in infrastructure funding.

The bank also said
it will focus more on investment banking, asset management, insurance
and international expansion, and plans “to consolidate our subsidiaries
within five business groups (First Bank of Nigeria, FBN Bank
International, Investment Banking & Asset Management, Insurance,
and Emerging Ventures),” which will be overseen by a new Group
Management Committee.

Transparency International, the global
corruption watchdog, wants member nations of the Group of 20 (G20) to
step up their efforts towards sustained financial sector reforms
against the background of growing corruption and negative impact on
economic recovery efforts.

Ahead of the
group’s two-day annual Finance Ministers and Central Bank Governors
meetings, which begins today in Washington D.C., United States of
America, the global anti-corruption body stated that reforms would
entrench ethical corporate governance in the face of growing prevalence
of financial frauds in the financial institutions of most members of
the group.

Good corporate
governance, according to its Chairman, Huguette Labelle, is critical to
sustainable financial institutions, adding that the integration of good
governance and anti-corruption measures are critical to the
sustainability and effectiveness of the reform measures.

“The time to act is
now to entrench good corporate governance culture. It is two years
since the onset of the financial crisis and the critically needed
reforms to protect the general public from fraud must be fully
implemented. The current scandals underline the need for better
oversight and efficient law enforcement,” he said.

Group’s resolutions

Mr. Labelle
recalled the group’s resolution calling on G20 members to ensure that
they implemented the financial regulations outlined at the end of its
meeting in 2008 as the main structural solutions to averting future
economic crises, warning that the complexities in new regulations on
derivative trading, hedge funds, “too big to fail” institutions or
prudential standards should not be a reason for any delay.

Stressing the need
for regulatory agencies to strengthen the transparency of all financial
products marketed to investors, the global body said this would ensure
clear requirements for comprehensive disclosure, and prevent abuses of
off-balance sheet instruments, while individuals and firms would be
sanctioned for fraud.

“Lack of corporate
governance, weak ethics and poor regulation was at the heart of the
financial crisis. This should not be allowed to happen again. Any
corporate communication to investors and to the general public should
be designed to inform them, and not to purposely sell weak products or
publish dressed up quarterly figures.

“If anyone has any
doubt about the urgent need for the G-20 to make integrity a crucial
issue in global financial reform, then they just have to look at
today’s newspaper headlines,” Mr. Labelle said.

World Bank statistics

Available World
Bank statistics, according to Mr. Labelle, indicates that the global
financial meltdown last year directly prevented over 50 million people
in the developing world from escaping abject poverty, adding that the
Finance Ministers and Central Bank Governors should use the occasion of
this week’s meeting to consider a comprehensive analysis of the G20
Action Plan to forestall a repeat of the global economic crisis.

As part of efforts
to entrench corporate governance in the nation’s financial system, the
Board of Directors of the Central Bank of Nigeria (CBN) late last week
rolled out an amendment of prudential guidelines on loan loss
provisioning first issued in 1990, prescribing a set of minimum
requirements for banks and other financial institutions.

The apex bank’s
governor, Sanusi Lamido Sanusi, said the review became necessary
bearing in mind the current dynamics in the industry to provide
measurement for loans, establishment of loan losses allowances, credit
risk disclosure and related matters.

The approved
amendment recognizes ‘Specialized Loans’ and ‘Other Loans’ as the two
provisioning categories, with the former using time-based approach,
while the current prudential guidelines for specific loans loss
provisions shall continue to be applied to other loans type.

According to Mr.
Sanusi, the time-based approach establishes longer time lines for
measuring asset quality, based on the gestational periods for projects
in sectors of the economy such as small and medium enterprises (SMEs),
agriculture and infrastructure.

The ‘Specialized
Loans’ comprise mortgage loans, margin loans, object finance, project
finance, real estate loans, SME loans and others, including corporate,
commercial and retail loans, advances, overdrafts, commercial papers,
bankers acceptances, bills discounted, leases, guarantees and other
contingencies connected with a bank’s credit risks.

The use of the .ng domain for online
business transactions with other countries is said to be affecting
business negatively, due to the high level of cyber crimes in the
country.

Bunmi
Akindele, a business woman, said, “Considering the way those in Europe,
United States, and Asia, among others, see Nigerians as a fraudulent
people to do online business with, using the .ng domain for your
business will certainly affect your business with organisations abroad.

“I
cannot register my company name with the .ng domain because it will
ruin my business as I cannot order for goods with that domain’s name
because it exposes my identity. The country has been portrayed in a bad
image because of the yahoo yahoo deals (Internet fraud) in Nigeria,”
added Ms. Akindele.

IP address, not .ng

However,
in a telephone interview with NEXT, Lanre Ayaji, the president of
Nigerian Internet Group (NIG) explained that the .ng domain name is not
the cause of failed online transactions, but the Internet Protocol (IP)
addresses from Nigeria.

“I
don’t really think that is the major reason why people are not using
it. I have been using the .ng domain for over 10 years now, and I have
not had any serious problem with it. People abroad who are scared of
doing business with Nigerians online are not using the domain name to
discriminate; they usually use the IP address to discriminate. The
discrimination is not done manually; it is done by the application
system that is operated abroad, and it is on that system that they list
the IP address which they don’t want to accept.

“The
moment an IP address is identified to be that of a Nigerian, that
person is barred from doing business online with that organisation. So,
it is not the domain name that causes the problem. Anybody that has a
perception that if he or she uses .ng, they will have problem doing
business online may have to re-examine that view. I think that is just
a mere perception, and not the reality,” said Mr. Ajayi.

Blame it on cybercrime

However,
operators agree that the high incidence of cybercrime is a major issue
that has also affected online transactions with Nigerians.

Mr.
Ajayi said, “I will encourage people to take up the .ng domain as it
may not affect their online transactions. But that is not to say that
the incidence of cybercrimes have not affected online transactions from
Nigeria.”

The
absence of policy to tackle cyber crime is a major problem. Jimson
Olufuye, the president of Information Technology Association of Nigeria
(ITAN), called on the federal government and regulators to put in place
appropriate legislations on cyber security to mitigate crimes. Mr.
Olufuye urged government to key into the toolkit recently launched by
the International Telecommunication Union (ITU) to reduce cybercrime
globally.

Benefits of .ng domain

Ugo
Akiri, an official of the Nigeria Internet Registrations Association
(NIRA), said the benefit of using the .ng domain are enormous,
particularly with regard to cleaning up the country’s image.

“The
.ng domain is a good instrument that will help to clean up Nigeria’s
image in terms of the negative use of the Internet these past years.
This will also help us to generate enough resources to invest in the
new generic top-level domain name (gTLDs) before foreigners overrun us
by taking up viable Nigerian geographical names for their new gTLDs.

“Access
to information is very important, as the world is developing daily by
new technologies and better ways of doing things. So, this would impact
on our access to information generally, and on education specifically,
as more Nigerian content will be available on the web,” she said.

Mr.
Ajayi also added that if Nigerians can register their businesses with
the .ng domain, it will help to improve the country’s economy without
the attendant capital flight.

“For
Nigerians, it saves foreign exchange. If you are not registered with
.ng, you would be registering with another gTLD and would be paying
dollar to the other country, but when you register with .ng, you are
paying naira to the registrar and you are saving money for the country,
instead for another country,” he said.

The
South African embassy has promised to improve on the challenges faced
by Nigerian business personnel in getting visas to that country, in
order to enhance the trade relations with Nigeria.

Thandi Mgxwati, Political Counsellor/Head of Lagos
Mission, South Africa High Commission, speaking on ‘Nigeria-South
Africa Bilateral Relations – Successes and Challenges’, said efforts
are currently being made to make visa applications and processing
easier for Nigerians wishing to travel to that country.

The South African envoy, who spoke at a breakfast
meeting organised by the Nigerian-South African Chamber of Commerce on
Wednesday in Lagos, said this is one of the ways to fully explore the
investment and trade opportunities available to both countries through
their bilateral relationship.

The relationship between Nigeria and South Africa
is believed to be skewed in favour of the latter, as there are more
investments and trading activities by South Africa in Nigeria, than the
other way round.

“South Africa is looking forward to working with
Nigerian businesses to further open up trade and investment
opportunities between the two countries, and we will like to see more
partnerships and more Nigerian businesses coming into South Africa. We
are trying to respond to the imbalance business arrangement by taking
advantage of these opportunities to create a better working condition
for all parties,” she said.

Ms. Mgxweti argued that Nigeria can gain a lot in
business partnership with South Africa in terms of industries,
agriculture, among others.

Investment opportunities

Trade relations between both countries since the
launch of the South Africa- Nigeria Bi-National Commission 10 years
ago, leapt from $16.5-million in 1999, to $2.1-billion in 2008.

Although Ms Mgxweti said she did not have current
statistics on the volume of trade between Nigeria and South Africa at
the time of the briefing, she however, hoped it is good, adding that
there is still a lot of business potentials in the two countries
waiting to be explored.

Visa problems

Most of the participants who spoke at the meeting
called for a quick resolution of the visa problems encountered by
Nigerians at the South African embassy, as the situation is affecting
Nigerians intending to do business with that country.

To this, Ms Mgxweti said, “We are currently
working on a short term solution. This we intend doing by introducing
systems to perfect the turnaround time for visa applications. This will
be used to provide more information to people, as we have realised that
the lack of information on the visa requirements by the embassy has
been a deterring factor to issuing visas.

“We intend creating a website which will enable
people to read more, and this will concurrently serve as a platform to
addressing issues of business barriers. We also want to use this medium
to encourage people who intend going for the World Cup to apply on time
for their visas and not leave it to the last minute, as this will help
save all the hiccups and unnecessary stress,” she added.

Nicholas Coleman, the new Commercial Counsellor at
the South Africa High Commission, said his mission to Nigeria is to
enhance trading opportunities between both countries, by providing
relevant information to potential investors and business personnel
wanting to explore the South African economy.

Alubani Sebanda, Head, South Africa Corporate
office, Stanbic IBTC Bank Plc, sponsors of the breakfast meeting,
recalled that the bank started with five branch offices in Nigeria, and
has been tapping from the vast Nigerian economy, and believes they can
still do more.

“We are an international repute bank with no
crisis record during the bank auditing and repositioning carried out by
the Central Bank of Nigeria, in August last year. We are still waxing
stronger and are encouraging a growing partnership and business
investments between both countries, and we are willing to extend our
private equity external bank by looking into enterprises and help them
gather information about what is happening in South Africa and what to
invest in,” he said.

Thobi Duma, Country Manager, South Africa Airways,
used the opportunity to encourage Nigerians to book their flights to
attend the World Cup, as this will open up more business opportunities
for them, while also providing them a means of relaxation and tourism.

The newly appointed group managing director of the Nigerian
National Petroleum Corporation (NNPC), Shehu Ladan, has joined his predecessor
to state that NNPC is fully in support of the planned deregulation of the
downstream sector of the petroleum industry by the federal government.

While presenting a paper, titled, “Downstream Petroleum Sector:
The Imperatives of Deregulation,” before a coalition of legislators at the
National Assembly in Abuja, on Wednesday, Mr. Ladan, said the speedy implementation
of the deregulation policy would go a long way in encouraging inflow of private
sector and international investment in the downstream sector.

“Without mincing words, let me join my predecessor to state that
NNPC is 100 per cent in support of deregulation, not just because it will
support our business, but because this is the only way that majority of
Nigerians will derive fair deal from the abundant petroleum resources in the
country. With deregulation, consumers will enjoy fair product prices and
operators will be in a position to recover full cost and reasonable margins on
their operations,” he said.

The NNPC boss argued that implementation of the policy would
give rise to efficiency in product usage, product availability and effective
competition among investors, hence putting an end to the “NNPC monopoly.”

Investors’ fear

Mr. Ladan said it is only when a deregulated regime is put in
place that the private refineries that have been licensed can really take off,
noting that investors who have been given licenses to build refineries are
scared of venturing into the multimillion naira project because of the
regulated regime in Nigeria.

“Clearly there is the need to move away from the current ad hoc
pricing to an automatic price adjustment mechanism that is truly
de-politicised. In the transition to full market liberalisation, the regulator
has the responsibility to monitor and check anti-competitive behaviour such as
price gouging and predatory pricing,” he explained.

The Corporation head further explained that complimentary
measures have been included in the 2009 supplementary and 2010 budgets to
cushion the likely effects of the policy, adding that the measures included the
provision of intra-city rail transportation in six major cities: Lagos, Kano,
Port-Harcourt, Jos, Enugu and Maiduguri, as pilot projects. He also said plans
were underway by the federal government to commit N373 billion to massive road
rehabilitation and new construction interventions across the entire country in
addition to the procurement of 25 railway locomotives.

“Part of the complementary measures to cushion the effect of
deregulation on the low income and the poor household include the provision of
low income housing scheme and civil servants mortgage scheme and N10 billion
revolving mass transit scheme in 2009 supplementary budget,” Mr. Ladan said.

The Chairman of the Coalition, Bassey Etim Bassey, said the
corporation head was invited to outline the merits and demerits of deregulation
to members of the National Assembly, to enable them to take an informed
position about the policy.

Stephen Covey, a motivational speaker, has said that in order
for organisations to grow effectively they need to first discover their “road
map.”

Speaking at an event with business representatives in Nigeria on
Wednesday in Lagos, organised by Zain Nigeria and tagged ‘An Evening with Dr.
Stephen Covey’, Mr. Covey said only an accurate road map will lead to great
improvement in business.

Maps and principles

“In business, there is need to practice positive mental attitude
but attitude and action is insufficient, the key is to have an accurate map,”
he said. “Every great breakthrough is a great win. If you want to make minor
involvement, work on behaviour and attitude; if you want to make quantum
involvement work on paradigms. A paradigm is like a model for assumption of a
map.

“To have an accurate map is extremely important and that can be
embodied in your mission statement. Secondly, the power of principles is very
in important in organisations. A true principle is always the same. So, the
idea is that you build your life and organisation on the correct paradigm or
map and the principles that are universal and timeless.”

Mr. Covey explained that principles are important in any
organisation or cultural environment but should not be misunderstood as values.

“Principles are not values; the key is to value principles. The
different is that values are social norms, personal, emotion and subjective
while principles are natural laws, impersonal, objective and factual,” he said.
“These principles are applied in any country and in any culture. The more you
value principles and live by principles the higher the trust become. The higher
the trust is, the lower the cost is and speeds is exalted enormously. When you
have lower trust, speed really slows down and cost goes up. So that is why it
is important to have a correct map or paradigm and live by principles. The
essence of what I teach over 140 countries around the world is to teach people
about research, strategic planning and leadership.”

Growth and impact

However, Mr. Covey said that in order for organisations to grow,
they must seek customers who can also aid in promoting their products and such
a relationship must be built on principles.

“Relationship with organisations and customers/clients must be
built on principles so that on the net promotion scores you get 9-10 scores on
the scale; people will be committed, loyal and would stay with you,” he said.
“After decade of research only one question correlative to an organisation’s
profitable growth (is relevant): how likely is it that a customer could
recommend this product to others? If they give you 9-10s, they become
promoters; anything less than eight are detractors, they would find fault with
your products and service and would not recommend you to others.”

Speaking with NEXT at the event, business participants agreed
that motivational lectures can help change and develop organisation and
governance in Nigeria.

Tunde Ayeye, a business consultant, said “I think it goes beyond
organisation effectiveness; it helps you in your life as an individual and I
think it very useful.”

Mr. Ayeye added that despite the problems in Nigeria, especially
corruption, there is a basic need to adopt principles in order to transform
society. “The truth of the matter is corruption is global and its pervasive.
You are a product of your choices, and you make choice based on principles. So,
I think other business and governance need to adopt those principles if we want
to transform our businesses and our society,” he said.

However, Ayo Akintujoye, a marketing executive at 2G Consulting
firm, said that the virtues recommended by the speaker are good, but the
cultural reality of the country has not fully allowed for change to take place.
“I have been to events like this both international and local and you discover
that there is a vacuum from what you learn and the cultural reality of
Nigeria,” he said.

Nigeria’s economy is set to grow 6.3 percent this year and
consumer inflation should stay in double-digits through 2011 as the government
slashes fuel subsidies and increases budgetary spending, a Reuters poll showed
on Thursday.

A poll of 11 analysts forecast Nigerian inflation to average
12.6 percent in 2010 and 11.5 percent next year.

That marks an acceleration since a previous poll in January,
which forecast 11.4 percent inflation this year but did not forecast inflation
next year.

The National Bureau of Statistics last week estimated March
inflation at 11.8 percent.

“Inflation will be sustained at a high level as the effect of
fuel price deregulation and expansionary fiscal policy becomes apparent,” said
Alan Cameron, analyst for London-based Business Monitor International.

The poll forecast sub-Saharan Africa’s No. 2 economy to grow 6.3
percent this year, down slightly from 6.7 percent last year and compared with a
forecast for 6.4 percent growth in a previous poll in January.

Analysts expected the budget’s fiscal deficit to grow by 3.5
percent this year, according to the poll, below government expectations of more
than 5 percent.

Central Bank Governor Lamido Sanusi warned last week that
double-digit inflation was a threat, but his top priority remained stimulating
economic growth and getting credit flowing in Africa’s biggest energy producer.

The central bank last week forecast GDP growth to average 7.5
percent in 2010.

“Nigeria’s balance sheet remains strong,” said Thalma Corbett,
chief economist at NKC Independent. “Continued strong growth in the services
and agriculture sectors will boost economic growth, as will oil output
expansion.”

Fuel deregulation

Sanusi has backed federal efforts to deregulate the fuel sector,
saying it may cause a brief spike in inflation but the economy would benefit in
the long run.

Despite vying with Angola as Africa’s top oil producer, Nigeria
imports some 85 percent of its fuel needs because of the disrepair and
mismanagement of its four state-owned refineries.

Fuel subsidies cost the government more than $4 billion a year.

Analysts said increased government spending this year would also
contribute to double-digit inflation.

Acting President Goodluck Jonathan is expected to sign into law
this week a N4.608 trillion budget, which lawmakers hope will help Nigeria out
of a downturn.

The poll’s forecast that the fiscal deficit would grow 3.5
percent this year, below government expectations of more than 5 percent, was
based on weaker-than-expected capital spending projections.

“We see the fiscal deficit coming in below official expectations
given that the capital expenditure component of the budget is unlikely to be
fully implemented,” Cameron said.

More than a third of this year’s budget is for capital spending
on areas including infrastructure, the power sector and development in the
oil-rich Niger Delta.

The oversubscription of Oando Plc’s Rights Issue announced on
Thursday was expected, some operators at the Nigerian capital market have said.

Gbenga Emmanuel, a portfolio manager at WealthZone Company, said
the 128 per cent subscription which the company recorded during its Right Issue
offer was “not surprising” to us market operators.

“We had predicted that the Right Issue would be oversubscribed
because investors’ interest in Oando, an indigenous oil company in Nigeria with
upstream and downstream operations, is still very strong,” he said.

Mr. Emmanuel said many of the company’s shareholders bought
additional rights during the offer. “Only few of them sold their rights,” the
finance analyst added.

Tunde Oladapo-Dixon, Chief Executive Officer of StockPicks
Consulting, also said the company’s Right Issue was oversubscribed because
“about 80 per cent of subscribers took their rights while some sold off their
rights.” Oando issued 301,694,876 ordinary shares of 50 kobo each at N70 per
share to existing shareholders who names appeared on the register of the
company as at the close of business on December 18, 2009. The issue opened on
January 25 and closed on February 19.

Indication of confidence

Oando, one of Nigerian energy groups, yesterday announced that
its recent Rights Issue was oversubscribed. The company, which has a primary
listing on the Nigerian Stock Exchange and a secondary listing on the
Johannesburg Stock Exchange, in a statement, said the Rights Issue that was
expected to raise N21 billion returned 128 per cent subscription.

Wale Tinubu, Oando’s Group Chief Executive, said, “We are
extremely pleased with the positive reaction to our rights issue in spite of
the seeming apathy to capital market investments.

This is an indication of the confidence of investors in our
ability to optimise resources to create superior returns. These funds will
complement our ongoing strategy of investing in high margin businesses as well
as supporting our expansion plans to take maximum advantage of opportunities
within Africa’s energy landscape,” he said.

Raising more funds

Seeking shareholders’ approval to raise the fund last August,
Mr. Tinubu, said the aggressive growth saw the company become highly leveraged,
and would therefore need to pay down and restructure some its loans under
better terms.

He added that the company also needed to raise further capital
from debt and equity financing sources to develop its new acquisitions that can
diversify its revenue stream.

As a result, the shareholders gave their approval and support
for N220 billion capital raising exercise last year. Specifically, the N20.4
billion begin the first phase of the capital raising programme, according to
Mr. Tinubu, “is an important step for Oando towards refinancing the acquisition
of upstream assets, providing operational capital to fund the operation of
upstream business and short & medium term investments in its gas and power
business segment.” He explained that after the right issue, what will follow
will be a combination of international debt and equity offerings through which
Oando hopes to raise between $500 million and $600 million. The final phase, he
added, would be a public offer later in the year.

High earnings

Oando, which has six business divisions -Exploration &
Production, Energy Services, Gas & Power, Marketing, Supply & Trading,
and Refining & Terminals, on April 12, announced results for the year
ending December 31, 2009. Its Pre-Tax profits increased by 21 per cent to
N10.1billion compared to N8.3 billion same period in 2008, while earnings per
share increased by 23 per cent.

In 2004, Oando raised N16 billion, the highest at that time by a
non-financial institution, through a rights issue and public offering at that
time. The funds realised accelerated the company’s transformation from a
downstream business into one of Nigeria’s largest indigenous energy groups.

Chrysler said
yesterday that it had lost $4 billion since emerging from bankruptcy
protection almost a year ago. But it also reported positive cash flow
and a small operating profit in the first quarter of 2010.

The results are the
first official look at the U.S. automaker’s finances since it came out
of bankruptcy June 10 under the control of the Italian automaker Fiat.

The chief executive
of both companies, Sergio Marchionne, said Chrysler is on track to meet
its 2010 targets, including a break-even-or-better performance, when
excluding one-time charges. On that basis, Chrysler earned $143 million
in the first quarter on revenue of $9.7 billion.

Counting one-off
charges, Chrysler lost $197 million in the first quarter, mostly due to
interest payments, compared with a $2.5 billion loss in the fourth
quarter.

Chrysler also said it had $7.4 billion in cash on hand as of March 31, about $1.5 billion more than it had at the end of 2009.

Separately, Fiat
reported a first quarter net loss of €25 million, or $34 million,
significantly narrower than the €410 million of a year earlier. But the
shares fell as many analysts had expected a small profit.

Sales rose to €12.9 billion, from €11.3 billion.

The figures were
released ahead of the presentation of Fiat Group’s five-year business
plan, expected to include a spin off of its automotive unit, which
produces the flagship Fiat brand.

The operating
profit at Chrysler occurred even as its sales in the United States
continued to decline, while many of its competitors began to report
large year-over-year gains. Chrysler’s market share was 9.2 percent in
the first quarter, down two points from a year earlier but up one point
from the fourth quarter.

Mr. Marchionne said he expects improvement in Chrysler’s sales and balance sheet in the coming months.

“This positive
operating result in the first quarter is a concrete indication to our
customers, dealers and suppliers that the 2010 targets we have set for
ourselves are achievable,” Mr. Marchionne said in a statement. “We are
also generating cash to finance the investments being made in our
product portfolio and brand repositioning.” From June 10 to Dec. 31,
the company lost $3.8 billion and had revenue of $17.7 million. It said
$2.1 billion of that loss was a charge related to the trust fund that
took over coverage of health care for United Automobile Workers
retirees on Jan. 1.

The rest was blamed largely on its steep decline in sales and “significant start-up costs.” Mr.

Marchionne said
Chrysler has been strengthening its liquidity since bankruptcy through
“improving trading margins, operational efficiencies and rigorous cost
discipline.” The company said it has $2.4 billion remaining in its
credit lines from the United States and Canadian governments.

Unlike General
Motors across town, Chrysler is not in a position to begin paying back
the money it borrowed from taxpayers and made no mention of repayment.
Mr. Marchionne has previously said Chrysler would pay back the loans by
2014.

G.M. on Wednesday
said it has paid off its $8.2 billion debt to the United States and
Canada in full, five years ahead of its original repayment schedule.
The company’s chairman and chief executive, Edward E. Whitacre, planned
to make the announcement during a visit to G.M.’s assembly plant in
Kansas City, Kansas.

(Mr. Whitacre also
planned to reveal a $257 million investment in the Kansas plant and one
in Michigan to build the next version of the Chevrolet Malibu sedan.)
G.M. did not repay all the $50 billion it borrowed from the United
States. Most of that amount was converted to a 61 percent equity stake
held by the U.S. Treasury Department.

Chrysler is 10 percent owned by the U.S. Treasury.

The New York Times

Airlines around the
world began to confront a huge backlog of passengers on Wednesday,
after six days of European airspace restrictions had forced the
cancellation of more than 100,000 flights and cost the airline industry
an estimated $1.7 billion.

While officials
said it could take weeks for some travel to return completely to
normal, some airlines in Europe and Asia said they were moving rapidly
to restore flights. Eurocontrol, the agency that coordinates regional
air-traffic management, said three-quarters of the 28,000 flights
scheduled for European airspace were expected to fly on Wednesday – the
highest proportion in days.

About two-thirds of
scheduled departures and half of arriving flights were operating at
Heathrow Airport outside of London. At Frankfurt International Airport,
about half as many flights as normal were taking off and landing.

A spokeswoman said
that airlines had added 90 supplementary flights in and out of Heathrow
since Britain reopened its airspace late Tuesday, becoming the last
major European country to do so after a huge plume of volcanic ash
spreading south and east from Iceland disrupted travel over much of the
continent.

But flights were
not resuming as quickly at other British regional airports. Only 10 per
cent of scheduled flights at Edinburgh operated on Wednesday morning, a
figure that was expected to rise to 50 per cent by the evening. In
Aberdeen, only 30 per cent of morning flights operated, while 65 per
cent were expected from 5pm.

The International
Air Transport Association (IATA), said Wednesday that the crisis had
cost airlines more than $1.7 billion in lost revenue through Tuesday.
At its worst, the association said, “the crisis impacted 29 per cent of
global aviation and affected 1.2 million passengers a day.” Before
restrictions were eased, the chaos had lasted twice as long as the
three-day closing of American airspace after the attacks of September
11, 2001, which devastated many airlines financially. By midday in
Paris, Air France said that it had been able to restore almost all
service across its entire network, and had flown more than 40,000
stranded passengers back to France since Monday.

The airline said it
expected to operate all its scheduled long-haul flights on Wednesday
and many European flights except for those to northern and northeastern
Europe, where some airports remained closed.

Aéroports de Paris,
which operates Charles de Gaulle and Orly airports, said all
intercontinental arrivals and departures and 75 per cent of European
and domestic flights were expected to operate Wednesday.

British Airways
planned to operate all of its intercontinental services from London’s
Heathrow and Gatwick airports on Wednesday, although many of its
domestic and European flights remained cancelled until at least
Wednesday afternoon.

Britain’s National
Air Traffic Service said it had handled roughly 130 flights in the
airspace over England and Wales between 1am and 7am on Wednesday and 35
flights in Scotland and Northern Ireland. British airspace would be
largely open on Wednesday, except for parts of Scotland with a “dense
concentration” of volcanic ash. Aer Lingus, the Irish flag carrier,
said it expected to resume a full flight schedule by early afternoon.

With their call
centres jammed by customers trying to re-book their flights, some
airlines found innovative ways to speed the process, including social
media networks.

The Dutch carrier KLM advised passengers on its Web site that re-booking could be done via Twitter or on its Facebook page.

According to
forecasts by Britain’s Met Office meteorological agency and the
Volcanic Ash Advisory Centre in London, winds were expected to continue
blowing the highest concentrations of ash westward toward the northeast
coast of Canada. By midnight Wednesday, the cloud was expected to be
largely clear of Europe, lingering over only Ireland and parts of
northern Scotland.

The New York Times