Distinguished Shareholders,
It is my great pleasure to welcome you all to the 12th Annual General Meeting of our Company, UACN Property Development Company (UPDC) Plc being held today, Tuesday 8th June, 2010 at the Arthur Mbanefo Hall, Golden Tulip Festac, Amuwo Odofin, Lagos.
Before I present to you the performance of the Company for the financial year ended 31st December, 2009, please permit me to review the operating environment of the business for the year under review.
Review of Operating Environment
The performance of the Nigerian economy in 2009 was impacted by the global economic recession. Real GDP growth rate in the year was estimated at 6.9% as against the planned growth rate of 7.5%, though higher than the 5.98% recorded in the preceding year. The growth in the economy was driven largely by the recovery in the oil sector from the second quarter of 2009, following the Amnesty deal of the Federal Government with the Niger Delta militants. Non-oil GDP recorded a growth rate of 8.61% against 9.5% in 2008, while oil GDP recorded a decline rate of 1.23% against the decline of 4.5% in the previous year.
The year-on-year inflation figure for 2009 was 12% against 15.1% for the preceding year. The target of a single digit inflation figure projected for the year was not achieved as a consistent upward trend was maintained through the year to November before it came down in December. The inflationary trend was as a result of the huge liquidity in the financial system arising from the quantitative easing by the CBN, fiscal expansion and rising global commodity prices in favour of weak consumer output in Nigeria.
The country's external debt stock stood at USD3.95 billion in 2009, showing an increase from the USD3.72 billion in December 2008. External reserves dropped by 20% from USD53 billion as at December 2008 to USD 42.41 billion in 2009. The Monetary Policy Rate (MPR) was 6.0% while Prime Lending Rate averaged 18.67%, up from 16.01% in 2008. The official Naira exchange rate to the USD depreciated by 12.84% during the year as the average exchange rate was N148.10 to a Dollar compared with N131.25 to a Dollar in 2008. The depreciation is due to decline in Government's revenue arising from fall in oil prices and reduction in Nigeria's oil production levels in 2009.
On the socio-economic front, the average rate of unemployment remained high at 11.8%, The erratic nature of electric power supply has continued to be a major constraint for businesses. Progress was however made in the re-establishment of peace and security in the Niger-Delta area with the amnesty granted to the militants by the Federal Government. The sustainability of the peace pact is however still a challenge.
Review of Operations
There was a significant decline in the level of activity in the real sector in 2009 resulting from global real estate market melt-down, the crash of the Nigerian equities market, credit crunch and weak earnings profile of most corporates. This situation was exacerbated by the inability/unwillingness of banks to extend further credit to the real estate sector.Cha
irman’s Statement contd
Board Changes
Fellow Shareholders, I am pleased to inform you of the recent changes on the Board of Directors. On 2nd January, 2010 Lt. General Mohammed Inuwa Wushishi (rtd) voluntarily retired as the Chairman of the Board of Directors upon attaining the age of 70 years. My humble self was appointed by the Board as the Acting Chairman. On your behalf, I thank Lt. General M. I. Wushishi for his immense contributions to the Board and Company and wish him the very best in all his future endeavours.
Following the elevation of Mr. Abdul Bello to the Board of our parent Company, UAC of Nigeria Plc as Chief Financial Officer, Mr Hakeem Ogunniran was recently appointed as the Managing Director of the Company. Mr. Bello remains on your Board as a non-Executive Director. Mrs Halima Tayo Alao and Mr Babatunde O. Kasali have also joined the board as non-executive directors. Please join me in wishing them a successful tenure.
Appreciation
Ladies and Gentlemen, I wish to express my appreciation to the management and staff of our Company for their efforts in working for the sustained profitability of the Company. I thank you, our esteemed Shareholders for your unwavering interest in our Company.
Finally, I thank my colleagues on the Board for providing the required leadership and direction for the Company.
I thank you all for your attention.
LARRY EPHRAIM ETTAH