Scott Gordon: Thank you, team. Our next question asks if it is clear that the new food processing plant being built for Tingo Foods will have a material contribution to group revenues and profitability. However, given the plant is not scheduled to come online for around another 12 months, can you comment on the plans for Tingo Foods in the meantime?
Darren Mercer: Yes, look, it is true that we expect, that whether we have considerable expectations around the new food processing plant. We, It’s going to give us a state-of-the-art facility that can process a whole wide range of food types and produce a multitude of food and beverage products. And it’s something we’ve said publicly. We expect it to contribute, a multi-billion dollars of revenue on an annual basis each year. But, notwithstanding the fact we’re waiting for this plant to come online, I’m delighted to tell you that Tingo Foods continues to expand, In fact, during the second quarter we added two major product groups to our range, one was based on around wheat, and the other was based around the maze. And at the time, and whilst I’m speaking today, it’s fair to say that those quantities are fairly small.
But what this has enabled us to do is to plan around forthcoming harvest, to enable us to build our supply chain and then thereby get far greater quantities of crops from the farmers to process into food producers. And so that we, where we know there is considerable demand for, but that progress wasn’t just on the supply side. During the quarter we also onboarded a major new wholesale customer, when, given how late it was in the quarter that we won the customer and the time I gave them, to book their orders, the amounts we delivered, again, were relatively small, but given the size of this particular customer in the market in which it operates, we’re very confident that this customer will become a very large account for Tingo Foods by the end of this year.
But what’s really pleasing, I think, about these developments, in particular, is that we managed to achieve them in spite of a period of what I called earlier in the presentation of economic stagnation, where the people of Nigeria had reduced their discretionary spend and wholesalers to restaurants and hotels and other customers had reduced their inventory levels whilst we were monitoring what was going on within the political situation in Nigeria. You’ve heard me reference before about the presidential election that took place in February of this year. Following this, there was some speculation that the election results were going to be challenged by opposition leaders. And that is what created this period of instability and stagnation. But with the new president was inaugurated at the end of May.
And with him now in place, we’re witnessing a recovery in consumer confidence and business confidence. Which to be fair has been underpinned and held by the new government’s focus on creating jobs and modernizing, and stabilizing the economy. And the benefit of course of that we mentioned earlier was this liberalizing supporting of its currency. But all of these points really indicate that the economic recovery in Nigeria is upon us, which of course bodes well for the rest of our business. And we’re also making progress with further developments in the current quarter, including in terms of continuing to expand our product range. In particular into areas where with produce that requires more heavily processed products such as sources. And we expect these developments also to generate a significant contribution in Q4 and beyond.
Scott Gordon: And our final question asks if today’s news about the commencement of a quarterly dividend is very welcome. Indeed, I am sure it will go a long way to redress the clearly undervalued share price. However, does the board not consider that those funds will be better spent on a share buyback?
Darren Mercer: Yes. Whilst you understand the sentiment, I think behind the question. I think it’s really important to put into perspective. The considerations we have as a board and ensuring that we do our best to deliver and then protect shareholder value. Because I mentioned earlier, the company spent almost a billion dollars on investments into CapEx and inventory during the quarter. Of course, not to mention the $170 million that we paid the tax then. And that investment was made, but the primary purpose of growing the three key divisions of the group, Tingo Mobile that we spent 460 million in new handsets on, but we’ve said we expect to start receiving significant revenues from at the end of Q3. Tingo DMCC, where we completed our first export transactions of almost $350 million during the quarter.
And Tingo Foods where we’ve secured huge quantities, produce that we’re going to see the benefits from, again, in Q3. You’ve heard me say earlier that we expect to start paying much higher dividends from Q3 onwards, without the billion dollars of expenditure we had and we’re just spending in Q2. The dividend almost certainly would’ve been somewhat higher this quarter. Look, our priority, our first priority as a board is maximizing shareholder return. And all shareholders we believe will reap the benefits of the billion dollars we’ve just spent. We’re just invested. And as a result of that we expect our cash balances to be significantly higher at the end of Q3 than they were at Q2. And that’s what gives this board the confidence that we will be in a position to increase our dividends from Q3 onwards.
Now, look, all of that said, it’s not lost on management or the board that our share price at these levels, it’s significantly below where we think it should be. Pairing in mind that we’ve generated around $1.8 billion of revenue and $600 million of EBITDA during the first half of this year. So, this dividend payment today, as I’ve said on several occasions, is the start of an ongoing regular course of the dividend program. We believe it is the message that will help us expand and grow the number of institutional shareholders on our shareholder list. Regular quarterly dividends that have a high dividend cover and offer very attractive yields, we believe are the ingredients that help us attract a new investor audience, you know, including those institutional income funds and pension funds alike.
And as such, we hope that gets reflected into the share price. However, should our share price continue to languish below a fair value, as we approach the end of Q3, the board, if it so chooses, may well consider a meaningful share buyback. Alongside a significant increase in dividend payments because what is clear is that we will, we believe or have sufficient cash reserve to accommodate both.
Scott Gordon: Thank you, team. That concludes our question-and-answer session. I would now like to turn the call back over to Mr. Mercer for his closing remarks.
Darren Mercer : Thank you, Operator. I would like to thank each of you for joining our earnings conference call today, and I look forward to continuing to update you on our ongoing progress and growth. If we were unable to answer any of your questions, please reach out to our IR firm, MZ Group, who will be more than happy to assist. Thank you and goodbye.
Operator: Ladies and gentlemen, this concludes today’s event. You may disconnect your lines and log off the webcast at this time and enjoy the rest of your day.