Economy
NGX Group’s Cost-saving Strategies Lift Q1 2023 Net Profit by 109%
By Aduragbemi Omiyale
The cost-saving strategies implemented by the board and management of Nigerian Exchange (NGX) Group Plc have yielded the expected result.
In the first quarter of 2023, the company recorded a 20.5 per cent shortfall in the revenue generated in the period under review to N1.3 billion from N1.7 billion in the same period of last year.
This was driven by a high economic and socio-political uncertainty as a result of the 2023 general election, cash scarcity and energy crisis, which reduced business transactions and consumer spending.
A critical look into the revenue streams of the firm showed that transaction fees, which accounted for 51.5 per cent of revenue, dropped by 30.6 per cent to N685.9 million from N988.1 million in Q1 2022, as treasury investment income, which contributed 31.1 per cent to the revenue, went down to N414.7 million from N520.5 million, primarily driven by relatively lower yields on the Group’s treasury investment portfolio owing to the unfavourable market conditions and uncertainties during the general election period.
However, other income grew by 57.7 per cent to N233.4 million in the first three months of this year from N148.0 million in the same time of last year as a result of more earnings from sundry, other sublease, and penalty fees, which all cumulatively accounted for 65.2 per cent of total other income, offsetting the drop in gross earnings.
On the expenditure side, NGX Group trimmed its total expenses by 10.0 per cent to N1.7 billion from N1.9 billion due to reduced personnel expenses and a fall in finance costs, with personnel expenses down by 9.95 per cent to N629.0 million in Q1 2023 from N698.0 million in Q1 2022.
It was observed that salaries and other staff benefits, which accounted for 93.4 per cent of personnel expenses, went down by 8.7 per cent to N588.1 million from N644.3 million due to streamlined operations and improved efficiency.
But the operating expenses grew by 13.9 per cent to N390.8 million from N343.0 million as a result of increased operational activities amidst the group’s preparation for the full physical resumption of office.
Business Post reports that EBITDA fell in the period by 30.3 per cent to N545.8 million from N783.5 million, while EBIT dropped 29.8 per cent to N456.1 million from N649.9 million.
The cost-saving initiatives, especially a drop in finance cost of the organisation, contributed to 21.5 per cent growth in the pre-tax profit to N412.2 million from N339.2 million, while the net profit jumped by 109.0 per cent to N310.0 million from N148.3 billion, resulting in significant growth in profit after tax margin of 23.3 per cent versus the 8.9 per cent recorded in Q1 2022.
“Despite the challenging macroeconomic environment during the quarter amidst cash and energy scarcity, and political tension from the 2023 elections, the Group remained resilient.
“We are pleased to announce a 109 per cent increase in net profit, achieved through the implementation of cost-saving measures that minimised the impact of revenue reduction, just as we are exploring new and innovative ways to capture more market share and appeal to a broader demographic.
“The group will continue investing in innovative marketing strategies to appeal to the changing consumer preferences, as well as explore opportunities to expand the product line, portfolio mix, and penetrate new markets.
“We stay committed to our long-term growth strategy and are confident in our ability to navigate the current challenging environment and create value for our stakeholders,” the chief executive of NGX Group, Mr Oscar Onyema, said.
By Adedapo Adesanya
The duo of Afriland Properties Plc and Geo-Fluids Plc crashed the NASD Over-the-Counter (OTC) Securities Exchange by a marginal 0.06 per cent on Wednesday, December 11 due to profit-taking activities.
The OTC securities exchange experienced a downfall at midweek despite UBN Property Plc posting a price appreciation of 17 Kobo to close at N1.96 per share, in contrast to Tuesday’s closing price of N1.79.
Business Post reports that Afriland Properties Plc slid by N1.14 to finish at N15.80 per unit versus the preceding day’s N16.94 per unit, and Geo-Fluids Plc declined by 1 Kobo to trade at N3.92 per share compared with the N3.93 it ended a day earlier.
At the close of transactions, the market capitalisation of the bourse, which measures the total value of securities on the platform, shrank by N650 million to finish at N1.055 trillion compared with the previous day’s N1.056 trillion and the NASD Unlisted Security Index (NSI) went down by 1.86 points to wrap the session at 3,012.50 points compared with 3,014.36 points recorded in the previous session.
The alternative stock market was busy yesterday as the volume of securities traded by investors soared by 146.9 per cent to 5.9 million units from 2.4 million units, as the value of shares transacted by the market participants jumped by 360.9 per cent to N22.5 million from N4.9 million, and the number of deals increased by 50 per cent to 21 deals from 14 deals.
When the bourse closed for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units valued at N3.9 billion, followed by Okitipupa Plc with 752.2 million units worth N7.8 billion, and Afriland Properties Plc 297.5 million units sold for N5.3 million.
Also, Aradel Holdings Plc, which is now listed on the Nigerian Exchange (NGX) Limited after its exit from NASD, remained the most active stock by value (year-to-date) with 108.7 million units sold for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 billion.
By Adedapo Adesanya
The euphoria around the recent appreciation of the Naira eased on Wednesday, December 11 after its value shrank against the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N5.23 or 0.3 per cent to N1,547.50/$1 from the N1,542.27/$1 it was valued on Tuesday.
It was observed that spectators’ activities may have triggered the weakening of the local currency in the official market at midweek as they tried to fight back and ensure the value of funds in foreign currencies strengthened.
The domestic currency was regaining its footing after the Central Bank of Nigeria (CBN) launched an Electronic Foreign Exchange Matching System (EFEMS) platform to tackle speculation and improve transparency in Nigeria’s FX market.
At midweek, the Nigerian currency depreciated against the Pound Sterling by N3.56 to close at N1,958.68/£1 compared with the preceding day’s N1,955.12/£1 and against the Euro, it slumped by 34 Kobo to trade at N1,612.66/€1, in contrast to the previous session’s N1,613.00/€1.
As for the black market segment, the Naira lost N45 against the American currency during the session to quote at N1,670/$1 compared with the N1,625/$1 it was traded a day earlier.
A look at the cryptocurrency market showed a recovery following profit-taking as the US Consumer Price Index report matched economist forecasts.
The news was enough to convince traders that the Federal Reserve is certain to trim its benchmark fed funds rate another 25 basis points at its meeting next week.
The move also saw Bitcoin (BTC), the most valued coin, return to the $100,000 mark as it added a 2.9 per cent gain and sold for $100,566.12.
The biggest gainer was Cardano (ADA), which jumped by 15.00 per cent to trade at $1.16, as Litecoin (LTC) appreciated by 10.4 per cent to sell for $121.76, and Ethereum (ETH) surged by 7.0 per cent to $3,929.30, while Dogecoin (DOGE) recorded a 6.7 per cent growth to finish at $0.4181.
Further, Binance Coin (BNB) went up by 5.2 per cent to $716.72, Solana (SOL) expanded by 4.6 per cent to $229.77, and Ripple (XRP) increased by 4.2 per cent to $2.43, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 apiece.
By Aduragbemi Omiyale
The Dangote Refinery located in the Lekki area of Lagos State has made its first export of premium motor spirit (PMS) just three months after it commenced the production of petrol.
In September 2024, the refinery produced its first petrol and began loading to the Nigerian National Petroleum Company (NNPC) on September 15.
However, due to some issues, the facility has not been able to flood the local market with its product, forcing it to look elsewhere.
In a landmark move for regional energy integration, Dangote Refinery has partnered with Neptune Oil to take its petrol to neighbouring Cameroon.
Neptune Oil is a leading energy company in Cameroon which provides reliable and sustainable energy solutions.
Dangote Refinery said this development showcases its ability to meet domestic needs and position itself as a key player in the regional energy market, adding that it represents a significant step forward in accessing high-quality and locally sourced petroleum products for Cameroon.
“This first export of PMS to Cameroon is a tangible demonstration of our vision for a united and energy-independent Africa.
“With this development, we are laying the foundation for a future where African resources are refined and exchanged within the continent for the benefit of our people,” the owner of Dangote Refinery, Mr Aliko Dangote, said.
His counterpart at Neptune Oil, Mr Antoine Ndzengue, said, “This partnership with Dangote Refinery marks a turning point for Cameroon.
“By becoming the first importer of petroleum products from this world-class refinery, we are bolstering our country’s energy security and supporting local economic development.
“This initial supply, executed without international intermediaries, reflects our commitment to serving our markets independently and efficiently.”
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