By Adedapo Adesanya
The gross earnings of Africa Prudential Plc dropped 7 per cent in the first six months of the year to N1.87 billion from N2.01 billion in the same period of 2019.
The company noted in its unaudited financial statements for the half-year ended June 30, 2020, the weak performance came on the premise of the COVID-19 pandemic, which it claimed wiped out as many contributions from its retainer fees, which contributes over 60 per cent of revenues from contracts with customers.
According to details contained in the documents, revenue from contract with customers, one of its major business segments, went down by 32 per cent year-on-year.
However, the company’s Profit After Tax (PAT) rose by 4.9 per cent during the period under review to N1.08 billion from N1.03 billion in H1 2019.
The registrar of some publicly listed firms said businesses that engage in contract of services on retainership basis were badly affected by the pandemic as a lack of business activities means services were cut by clients in line with business continuity initiatives.
During the period under review, revenue from contracts with customers contracted by 32.12 per cent year-on-year on the back of the effect of COVID-19 on the business landscape. This led to a 100 per cent drop in retainer fee in the first half of the year.”
However, the company said it was able to increase fees from corporate actions by 34.9 per cent, register maintenance by 32.8 per cent and digital consultancy by 94.3 per cent year-on-year.
Also, a quarter-on-quarter analysis showed that the company has been able to improve revenue from fees from corporate actions by 1791.9 per cent and register maintenance by 171.4 per cent.
Despite the drop in revenues from contracts year on year, the registrar did better quarter-on-quarter, rising by 249 per cent to N490 million in revenue from contracts, majority of which it said came in the second quarter of the year.
Africa Prudential reported a half-year earnings per share of 54 kobo compared to 51 kobo same period in 2019.
Speaking on the performance, the company’s Managing Director, Mr Obong Idion said, “Our Q1 results showed the impact of the pandemic on our business.
“However, we have been able to put in place structures to help us maximize the current business cycle.
“Through this structure we were able to achieve an impressive quarter-on-quarter results, increasing gross earnings by 52 per cent and PAT by 144 per cent.
“We were also able to deliver an improved result year-on-year, growing interest income and PAT by 12 per cent and 5 per cent respectively.
“As the company continues to observe safety measures to ensure the safety of staff and customers, we have enhanced our virtual channels to meet the needs of our various categories of customers while reducing the need for physical visits significantly,” he added.
On the impact of the COVID-19, the company has put in place appropriate measures to respond to the global COVID-19 pandemic.
In line with the directives from the government to curtail the spread of the virus, the company activated its business continuity plan and also a ‘Work from Home’ plan thus, providing the necessary tools to employees to enable them to work effectively.
Africa Prudential added that it was assessing the impact of COVID-19 on its earnings, liquidity, capital, employee, customers and other stakeholders.
Dipo Olowookere