NASD Plc Suffers 50.1% Decline in Profit in 2019

By Adedapo Adesanya

The profit after tax of NASD Plc recorded a 50.1 per cent plunge in the 2019 financial year, closing at N45.1 million as against N90.4 million it ended in the 2018 fiscal year.

This information was contained in the company’s annual report, which also showed that the company recorded a lower profit before tax (PBT) of N36.1 million versus N62.0 million a year earlier, indicating a decline of 41.8 per cent.

Business Post reports that during the period under review, the amount paid as tax was low at N8.9 million as against N28.3 million in the previous year.

The breakdown showed that the company had a ‘Nil’ company income tax for 2019 (2018: nil) due to its carried forward unrelieved losses situation. The minimum tax has been computed as the company is liable to be assessed under the minimum tax law.

It, however, explained that education tax is not included as a result of the assessable loss situation.

NASD’s profit per share also took a slide to N10.14 from N20.34 while the company’s total liabilities and equity stood at N660.8 million compared to N617.9 million, indicating a rise of 6.9 per cent.

It said in the year, there was a drop in fees and commission by 3.2 per cent to N161.95 million from N167.38 million in the preceding period.

In terms of the company’s employees benefits and compensation costs, it rose by 27.4 per cent to N90.1 million from N70.7 million in the previous year.

The company saw N510,000 made on write-back no longer required in the year while N102.9 million was expended on other operating expenses whereas N92.3 million was published in 2018.

These spurred NASD Plc to end the year with an operating loss of N30.6 million compared to a gain of N4.3 million marked in the 2018 financial period.

There was, however, a rise in the interest income made on treasury bills, money market placements and bonds during the period; N65.7 million versus N57.7 million in 2018.

Other income (gains from asset disposal) raked in N890,000 compared to N529,000 recorded in the same period in 2018.

Speaking on the result, the Managing Director of NASD, Mr Bola Ajomale, explained that “the decrease in market activity experienced in 2019 is a sharp change in trend from what was witnessed in 2018 and was a direct result of a downturn in market activity as well as a reduction in the number of new securities admitted to the market.

“The continued decline in the country’s risk profile coupled with the sustained dominance of the fixed income sector of the market also contributed to investor apathy.”

However, he assured that, “NASD will continue to build confidence in the OTC market by working with issuers to improve their reporting and information disclosure.”

“Consistent with this, in 2019, new rules and policies were developed to identify and appropriately treat market infractions and disputes. In 2019, we also successfully implemented our Trade Guarantee Fund and got approval with SEC to execute Negotiated Deals on our market.

“As the market continues to grow, we shall not relent in increasing stakeholder confidence by ensuring an organised, transparent and efficiently run market,” he added.

Looking forward, Mr Ajomale said despite the disruptions brought about by the novel coronavirus pandemic, “new opportunities that are arising out of this situation and intend to remain versatile and flexible to maintain market operations while providing capital raise services to enterprises that now have an even more pronounced need for the capital market.”