Business reorganisation lifts NGX’s H1 earnings to N4.22b

• Firm invests in new businesses to consolidate performance

The Nigerian Exchange Group (NGX Group) has achieved 138.3 per cent growth in gross earnings in its half-year (H1) operations.

The group’s unaudited result for the half year ended June 30, 2022, showed a 138.3 per cent rise in gross earning to N4.22 billion, from N1.77 billion recorded in the corresponding period in 2021.

The group linked the improved performance to strategic steps taken to reorganise its business, laying the foundation for the rebirth of the franchise as it became a fully-fledged for-profit making company with a clear focus on maximising resources and improving stakeholder returns in 2021.

Its operating profit rose to N273.2 million in June 2022, from an operating loss of N177.2 million in June 2021, driven by 138.3 per cent growth in gross earnings. Profit before income tax grew by 134.4 per cent, from N521.9 million to N1.22 billion, due to impressive growth in the top line.

According to the group, despite an increase in the effective tax rate to 32.95 per cent relative to 13.84 per cent in June 2021, profit after income tax grew by 82.4 per cent to N820.2 million from N449.7 million recorded in 2021.

The group said this resulted in a decline in profit after tax margin to 19.45 per cent from 25.42 per cent recorded in June 2021.

Furthermore, total assets rose by 59.9 per cent to N39.8 billion from N24.9 billion achieved 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 Dec. 2021.

In his comment, the Group Managing Director/Chief Executive Officer, Oscar Onyema said the performance in the first of 2022 was a testament to the group’s 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 particular challenges inherent in our operating environment.

He said the goal remains to sustain its position as a leading integrated market infrastructure group in Africa, by diversifying its 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.”

Onyema hinted that revenue growth of 140.4 per cent to N3.82 billion from N1.58 billion recorded in June 2021 was driven by 165.1 per cent growth in treasury investment income.

“198.4 per cent growth in transaction fees (60.7 per cent of revenue) to N2.32 billion in June 2022 from N777.7 million recorded in June 2021 was due to a significant increase in trading activities in Nigerian Exchange Limited (NGX) (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.

“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, yearly charges from brokers, dealing license and membership fees earned by the Group,” he stated.