Economy
NGX Group’s Profit Rises 82.4% in Six Months
By Adedapo Adesanya
Nigerian Exchange (NGX) Group Plc has recorded an 82.4 per cent growth in profit in the first six months of the year, rising to N820.167 million from N449.658 million in H1 2021.
This information was contained in the NGX group’s unaudited results for the half-year ended June 30, 2022, which noted that revenue rose by 140.4 per cent to N3.823 billion during the period from N1.59 billion in 2021.
Highlights of the result included gross earnings of 138.3 per cent improvement to N4.22 billion from N1.77 billion, driven by 165.1 per cent growth in treasury investment income (26.6 per cent of revenue) to N1,017.4 million in June 2022 relative to N383.7 million in the comparative period in 2021 driven largely by relatively higher yields on the Group’s treasury bills, bonds and fixed deposit investments.
There was a 198.4 per cent growth in transaction fees (60.7 per cent of revenue) to N2.3 billion in June 2022 from N777.7 million recorded in June 2021 due to a significant increase in trading activities in the Exchange.
The company also saw an 18.6 per cent increase in listing fees (9.5 per cent of revenue) to N363.8 million in June 2022 from N306.8 million in June 2021 buoyed by improved listing on the Exchange in the first half of 2022 relative to the first half of 2021.
Rental income (1.4 per cent of revenue) earned from NGX Real Estate lease of office floor spaces recorded a 60.5 per cent increase from N32.2 million in June 2021 to N51.7 million.
However, there was a 15.4 per cent decline in other fees (1.8 per cent of revenue) to N69.7 million in June 2022 from N82.4 million in June 2021 which represents rental income from the trading floor, annual charges from brokers, dealing license and membership fees earned by the Group.
There was a 119.6 per cent increase in other income (9 per cent of gross earnings) driven primarily by a 376.5 per cent improvement in market data income (56 per cent of other income) to N220.94 million from N46.3 million reported in June 2021 which is made up of technology income, other sub-lease income, and penalty fees.
There was a 15.99 per cent growth in other operating income (31 per cent of other income) from N105.6 million in June 2021 to N122.5 million in June 2022.
Also, total expenses grew by 102.6 per cent from N1.9 billion in June 2021 to N3.9 billion in June 2022 primarily driven by a 231.6 per cent growth in operating expenses (59.1 per cent of total expenses) to N2.3 billion from N702.9 million in June 2021. This was largely as a result of a finance cost (57 per cent of operating expenses) of N1.3 billion related to a term loan taken during the period. Personnel expenses (34.4 per cent of total expenses) also grew by 27 per cent from N1.01 billion in June 2021 to N1.35 billion during the period under review.
The exchange’s made an operating profit of N273.2 million in June 2022 compared to an operating loss of N177.2 million in June 2021, as a result of 138.3 per cent growth in gross earnings.
Profit before income tax grew by 134.4 per cent to N1.22 billion in June 2022 from N521.9 million in the corresponding period in 2021 due to an impressive growth in the top line which was more than sufficient to mitigate the impact of the increases in key expense lines.
Despite an increase in effective tax rate to 32.9 per cent relative to 13.8 per cent in June 2021, profit after income tax grew by 82.4 per cent to N820.2 million from N449.7 million. This resulted in a decline in profit after tax margin to 19.5 per cent from 25.4 per cent recorded in June 2021.
Total assets rose by 59.9 per cent to N39.8 billion from N24.9 billion in December 2021, driven primarily by 91.3 per cent growth in investment in associates to N31.99 billion from N14.8 billion in Dec. 2021, and 116.8 per cent growth in Cash and Cash equivalent to N4.3 billion from N2.2 billion in December 2021.
Total liabilities recorded a 394.7 per cent increase from N3.8 billion in December 2021 to N18.6 billion as a result of a N14.5 billion term loan used to facilitate the increase in investment in select associates.
Speaking on the result, the Group Managing Director/Chief Executive Officer, Mr Oscar Onyema said, “In 2021, we took strategic steps to reorganise our business by laying the foundation for the rebirth of our franchise as we became a fully-fledged for-profit making company with a clear focus on maximizing resources and improving stakeholder returns.
“Our performance in the first half of 2022 is a testament to our ability to deliver long-term value. We recorded impressive growth in our top line to deliver a profit before tax of N1.22 billion despite the peculiar challenges inherent in our operating environment.
“Our goal remains to sustain our position as a leading integrated market infrastructure group in Africa, by diversifying our revenue streams, and identifying and investing in new businesses. We remain focused on building formidable businesses through broader and deeper involvement in every sphere of the capital market value chain through informed investments in profitable verticals and enhanced risk management practices, without losing sight of emerging opportunities in unrelated businesses within the Sub-Saharan African region.”
By Adedapo Adesanya
Nigeria ranked as Africa’s leading destination for upstream oil and gas investment in 2024, new research from market intelligence firm, Wood Mackenzie, has shown, accounting for three out of four Final Investment Decisions (FIDs) announced by global oil and gas majors, totaling $13.5 billion.
The FIDs announced within the Nigerian market included Shell’s $122 million investment in the Iseni Gas Project, TotalEnergies’ $566 million commitment to the Ubeta Gas Project and Shell’s approval of the Bonga North Tranche 1 project valued at around $5 billion.
According to the Special Adviser to President Bola Tinubu on Energy, Ms Olu Verheijen, these investments reflected Nigeria’s ongoing efforts to unlock its hydrocarbon potential through investor-friendly policies and strategic global partnerships.
Last year, Nigeria introduced several initiatives to create a conducive environment for oil and gas investors, including new tax incentives aimed at attracting up to $10 billion in natural gas investments.
Nigeria, which is Africa’s largest oil producer, also offered tax relief for gas investors, reducing corporate income tax and extending capital allowance benefits – for deepwater gas projects.
Other policies include the Presidential Directive on Local Content Compliance Requirements 2024 to address the reduction in oil and gas investments caused by high operating costs compared to global markets.
Also, the Presidential Directive on Reduction of Petroleum Sector Contracting Costs and Timelines 2024 reduces the time spent to award contracts for oil and gas projects.
In addition to the directives, Nigeria also launched its 2024 oil and gas licensing round, offering 19 blocks for exploration, demonstrating its commitment to continued collaboration with local, regional and international partners.
Market analysts note that with this momentum, further FIDs are anticipated, including TotalEnergies’ expected $750 million commitment to the Ima Shallow Gas Project in 2025.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.22 per cent decline on Monday, January 20, with the market capitalisation shedding N2.35 billion to close at N1.073 trillion compared with the preceding session’s N1.075 trillion and the NASD Unlisted Security Index (NSI) going down by 6.79 points to wrap the session at 3,105.12 points compared with 3,111.91 points recorded in the previous session.
It was observed that the loss recorded on the first trading day of the week was triggered by UBN Property Plc, which crashed by 20 Kobo to trade at N2.00 per share versus last Friday’s N2.20 per share.
However, the share price of Industrial and General Insurance (IGI) Plc went up by 4 Kobo to 40 Kobo per unit from 36 Kobo per unit, it could not stop the bourse from going down at the close of transactions.
The activity chart showed that on Monday, the volume of securities traded by investors increased by 57.9 per cent to 767,610 units from the 486,215 units traded in the preceding session, while the value of shares traded yesterday slumped by 17.7 per cent to N2.3 million from the N2.8 million recorded in the preceding trading day, as the number of deals declined by 14.3 per cent to 12 deals from the 14 deals carried out in the previous trading day.
At the close of transactions, FrieslandCampina Wamco Nigeria Plc remained the most active stock by value on a year-to-date basis with the sale of 4.1 million units worth N162.9 million, followed by Geo-Fluids Plc with a turnover of 9.1 million units valued at N44.0 million, and 11 Plc with the sale of 55,358 for N14.5 million.
Also, Industrial and General Insurance (IGI) Plc closed the day as the most active stock by volume on a year-to-date basis with 25.3 million units sold for N5.9 million, Geo-Fluids Plc came next with 9.1 million units valued at N44.0 million, and FrieslandCampina Wamco Nigeria Plc with 4.1 million units worth N162.9 million.
By Adedapo Adesanya
The value of the Naira weakened against the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, January 20 amid FX pressures associated with this period.
Most people who came into the country for Christmas and New Year holidays are already going back and are in need of forex, putting pressure on the local currency.
Also, the poor performance of the domestic currency could be attributed to end to the 42-day access granted by the Central Bank of Nigeria (CBN) to Bureaux de Change (BDC) operators to buy forex at official price.
According to data from the FMDQ Securities Exchange, the Nigerian Naira lost 0.16 per cent or N2.47 on the greeback yesterday to sell at N1,550.05/$1, in contrast to last Friday’s rate of N1,547.58/$1.
Similarly, the Naira slumped against the Pound Sterling in the spot market on Monday by N23.39 to trade at N1,906.98/£1 versus N1,883.59/£1 and depreciated against the Euro by N23.14 to sell for N1,613.48/€1 compared with last Friday’s N1,590.34/€1.
However, in the parallel market, the Nigerian currency improved its value against the Dollar during the session by N5 to quote at N1,665/$1 compared with the previous session’s N1,670/$1.
As for the cryptocurrency market, it turned red yesterday as the US President, Mr Donald Trump, didn’t bring up the much-expected subject of crypto in his inauguration speech on Monday afternoon.
Mr Trump had promised a far more friendly crypto policy stance than the previous administration but in the long speech that announced his plans in the coming days, he didn’t make mention of Bitcoin or crypto.
Just over the weekend, the President ignited a speculative frenzy with the Friday evening launch of the Trump meme coin, which was shortly followed by a meme coin associated with his wife, Melania.
Dogecoin (DOGE) crumbled yesterday by 6.3 per cent to $0.3419, Solana (SOL) slumped by 4.7 per cent to $235.32, Cardano (ADA) fell by 3.6 per cent to $0.9777, and Litecoin (LTC) moderated by 1.9 per cent to $114.98.
Further, Ethereum (ETH) went down by 1.7 per cent to $3,241.36, Binance Coin (BNB) retreated by 1.4 per cent to $693.30, Ripple (XRP) depreciated by 1.2 per cent to $3.06, and Bitcoin (BTC) tumbled by 0.8 per cent to $101,746.99, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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