…Nigerian Exchange Group (NGX Group) Reports 138.3% Growth in Gross Earnings to N4.2 billion for the Half Year Ended 30 June 2022
Nigerian Exchange Group Plc (NGX Group) has announced its unaudited results for the half year ended 30 June 2022.
Group Financial Highlights 1
| Thousands of Naira (N) | HY 2022 | HY 2021 | % ∆ |
| Revenue | 3,823,254 | 1,590,257 | 140.42% |
| Other income | 392,481 | 178,717 | 119.61% |
| Gross earnings | 4,215,735 | 1,768,974 | 138.32% |
| Personnel expenses | (1,354,529) | (1,066,821) | -26.97% |
| Depreciation and amortisation | (256,937) | (176,391) | -45.66% |
| Operating expenses | (2,331,066) | (702,943) | -231.62% |
| Total expenses | (3,942,532) | (1,946,155) | -102.58% |
| Expenses (% of gross earnings) | 93.52% | 110.02% | n/m |
| Operating profit/(loss) | 273,203 | (177,181) | n/m |
| Operating profit/loss margin | 6.48% | -10.02% | n/m |
| Share of profit-equity accounted investees | 949,967 | 699,066 | 35.89% |
| EBITDA | 530,140 | (790) | n/m |
| EBITDA margin | 12.58% | -0.04% | n/m |
| Profit before minimum tax | 1,223,170 | 521,885 | 134.38% |
| Minimum tax | – | – | |
| Profit before income tax | 1,223,170 | 521,885 | 134.38% |
| Profit before income tax margin | 29.01% | 29.50% | n/m |
| Income tax expense | (403,003) | (72,227) | 557.97% |
| Effective tax rate | 32.95% | 13.84% | n/m |
| Profit for the year | 820,167 | 449,658 | 82.40% |
| Profit after tax margin | 19.45% | 25.42% | n/m |
| Total assets | 39,758,814 | 24,867,831 | 59.88% |
| Total equity | 22,490,787 | 21,938,255 | 2.52% |
| Total liabilities | 17,268,027 | 2,929,576 | 489.44% |
| Return on equity (%) | 3.65% | 2.05% | 160 bps |
| Return on assets (%) | 2.06% | 1.81% | 25 bps |
Commenting, Mr. Oscar N. Onyema OON, the Group Managing Director/Chief Executive Officer, 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”.
Group Financial Performance Review
- Gross earnings recorded a significant growth of 138.3% to N4.22 billion from N1.77 billion as of June 2021 benefitting primarily from a 140.4% growth in revenue (91% of gross earnings), and 119.6% growth in other income (9% of gross earnings).
- Revenue growth of 140.4% (N2.23 billion) to N3.82 billion in June 2022 from N1.58 billion recorded in June 2021 was driven by:
o 165.1% growth in treasury investment income (26.6% 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.
o 198.4% growth in transaction fees (60.7% of revenue) to N2,320.7 million in June 2022 from N777.7 million recorded in June 2021 due to a significant increase in trading activities in Nigerian Exchange Limited (“NGX” or “The Exchange”).
o 18.6% increase in listing fees (9.5% 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.
o Rental income[2] (1.4% of revenue) earned from NGX Real Estate lease of office floor spaces recorded a 60.5% increase from N32.2 million in June 2021 to N51.7 million.
o 15.4% decline in other fees (1.8% of revenue) to N69.7 million in June 2022 from N82.4 million in June 2021. This represents rental income from the trading floor, annual charges from brokers, dealing licenses, and membership fees earned by the Group.
- 119.6% increase in other income (9% of gross earnings) driven primarily by:
o 376.5% improvement in market data income (56% 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.
o 15.99% growth in other operating income (31% of other income) from N105.6 million in June 2021 to N122.5 million in June 2022.
- Total expenses grew by 102.6% from N1.9 billion in June 2021 to N3.9 billion in June 2022 primarily driven by a 231.6% growth in operating expenses (59.1% of total expenses) to N2.3 billion from N702.9 million in June 2021. This was largely a result of a finance cost (57% of operating expenses) of N1.3 billion related to a term loan taken during the period. Personnel expenses (34.4% of total expenses) also grew by 27% from N1.01 billion in June 2021 to N1.35 billion during the period under review.
- Operating profit of N273.2 million in June 2022 from an operating loss of N177.2 million in June 2021, as a result of 138.3% growth in gross earnings.
- Profit before income tax grew by 134.4% 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 the effective tax rate to 32.95% relative to 13.84% in June 2021, profit after income tax grew by 82.4% to N820.2 million from N449.7 million. This resulted in a decline in profit after tax margin to 19.45% from 25.42% recorded in June 2021.
- Total assets rose by 59.9% to N39.8 billion from N24.9 billion in Dec. 2021, driven primarily by 91.3% growth in investment in associates to N31.99 billion from N14.8 billion in Dec. 2021, and 116.8% growth in Cash and Cash equivalent to N4.3 billion from N2.2 billion in Dec. 2021.
- Total liabilities recorded a 394.7% increase from N3.8 billion in Dec. 2021 to N18.6 billion as a result of an N14.5 billion term loan used to facilitate the increase in investment in select associates.
