Nigerian Exchange Group Plc (NGX Group), a leading integrated market infrastructure provider in Africa has announced its audited results for the financial year ended 31 December 2022.
NGX Group Plc services the largest economy in Africa and is strengthening the competitiveness of African economies to achieve global prosperity.
As a key player in the continent’s financial markets, NGX Group Plc takes an active role in shaping the future of the markets through our investment in business innovation and technology.
NGX Group provides a wide range of services including listing and trading securities, licensing, market data solutions, ancillary technology, regulation, real estate, and more through its wholly owned subsidiaries – NGX Exchange, NGX REGCO, and NGX RELCO.
The Group is also involved in the financial infrastructure space with investments in NG Clearing Limited, Central Securities and Clearing Systems (CSCS), and OTC platforms.
Nigerian Exchange Group is committed to the highest international standards. To support this commitment, NGX Group belongs to a number of international and regional organisations that promote the development and integration of global best practices.
NGX Group continues to evolve in order to meet the needs of its valued customers and to achieve the highest level of competitiveness.
Group Financial Highlights Income statement
In millions of naira Dec-22 Dec-21 % Change
Revenue 6,170.4 5,777.1 6.8%
Other income 1,329.2 1,021.7 30.1%
Gross earnings 7,499.6 6,798.8 10.3%
Personnel expenses (3,664.5) (3,239.7) -13.1%
Operating expenses (2,508.2) (2,712.8) 192.5%
EBITDA 1,323.4 775.9 70.6%
Depreciation and Amortization (550.7) (494.1) -11.4%
EBIT 772.7 281.8 174.2%
Interest expense on borrowings (2,100.5) –
Total expenses (8,827.4) (6,516.9) -35.5%
Operating (loss)/Profit (1,327.8) 281.8 -571.1%
Share of profit-equity accounted investees 2,150.8 2,119.4 1.5%
Profit before income tax 823.0 2,401.2 -65.7%
Profit /(loss) for the year 698.5 2,248.2 -68.9%
Balance sheet
In millions of naira Dec-22 Dec-21 % Change
Cash and cash equivalent 4,749.7 2,248.2 111.3%
Long-term investment securities 16,330.1 10,373.5 57.4%
Investment in associates 29,711.2 14,750.6 101.4%
Property, plant, and equipment 3,827.4 4,209.3 -9.1%
Total assets 57,063.2 37,868.9 50.7%
Total equity 36,807.3 34,114.4 7.9%
Total liabilities 20,255.9 3,754.6 439.5%
Key ratios Dec-22 Dec-21 % Change
Returns on average equity (ROAE) 2.0% 6.6% -70.1%
Return on average assets (ROAA) 1.6% 0.7% 118.7%
EBITDA margin 17.6% 11.4% 54.6%
Operating profit margin -17.7% 4.1% -527.1%
Profit after tax margin 9.3% 33.1% -71.8%
Commenting, Mr. Oscar N. Onyema OON, the Group Managing Director/Chief Executive Officer, said: “NGX Group continued to bed down its operations post demutualization and restructuring. Despite the economic headwinds affecting the country, as demonstrated by our year-end results, we have continued to create lasting value. Our top-line expansion drove a 70.6% increase in Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA) in 2022.
In the same year, the Group leveraged its strong equity position and strategically increased its investment in an associate company in order to drive growth, boost efficiency, and further maximize overall shareholder value.
However, the bottom-line operating performance slipped mainly due to the interest expenses resulting from borrowing to fulfill the strategic acquisition mentioned above.
Our growth will be driven by deepening value creation in subsidiaries and expansion into adjacent businesses.
As an organisation, we remain committed to becoming Africa’s preeminent integrated market infrastructure group”.
Group Financial Performance Review:
• Nigerian Exchange Group achieved a year-on-year (YoY) growth of 10.3% in gross earnings to ₦7.5 billion in FY 2022 from ₦6.8 billion reported in FY 2021. This double-digit growth in the top line was because of the persistent growth in revenue (82.3% of gross earnings) and an impressive 30.1% increase in other income.
• Revenue grew by 6.8% to ₦6.2 billion from ₦5.8 billion driven largely by the 51.2% growth in treasury investment income to 2.0 billion (FY 2021: ₦1.3 billion). Transaction fees which accounted for 51.2% of revenue also increased by 9.0% YoY to ₦3.2 billion (FY 2021: ₦2.9 billion).
Growth in treasury investment income (32.9% of revenue) to ₦2.0 billion in FY 2022 relative to ₦1.3 billion in FY 2021 was driven largely by relatively higher yields on the Group’s treasury investment portfolio owing to improved yields on treasury bills, bonds, and fixed deposit instruments.
A 9.0% growth in transaction fees (51.2% of revenue) to ₦3.2 billion in FY 2022 from ₦2.9
billion recorded in FY 2021 was driven by improved trading activities in Nigerian Exchange
Limited.
Listing fees (12.6% of revenue) grew by 1.3% to ₦774.7 million in FY 2022 from ₦754.9 million in FY 2021 driven primarily by a relatively higher listing of corporates on the Exchange in the year ended 2022 compared to the same period in 2021.
Rental income (1.6% of revenue) earned from NGX Real Estate lease of office floor spaces
recorded a 19.8% increase to ₦99.2 million in FY 2022 from ₦82.8 million recorded in FY
2021.
Other fees which represent rent of the trading floor, annual charges from brokers, dealing licenses, and membership fell by 84.2% to ₦109.0 million from ₦689.9 million.
• Growth recorded by the Group in other income was driven by a 47.2% increase in market data income to ₦581.4 million from ₦395.0 million: Income of ₦93.7 million from technology accounted for 7.1% of other income. A 1.6% growth in other operating income made up of sublease income and penalty fees resulted in ₦635.4 million (FY 2021: ₦625.5 million).
• Total expenses grew by 35.5% to ₦8.8 billion from ₦6.5 billion in FY 2021 primarily driven by interest expense on borrowings recorded as ₦2.1 billion. Personnel expenses (41.5% of total expenses) also grew by 13.1% to ₦3.7 billion (FY 2021: ₦3.2 billion) while operating expenses which accounted for 28.4% of total expenses fell by 7.7% to ₦2.5 billion from ₦2.7 billion in FY 2021.
• EBITDA grew by 70.6% to ₦1.3 billion from ₦775.9 million recorded in FY 2021. This emanated from the 7.8% marginal growth in gross earnings over operating costs.
• EBIT for FY 2022 was ₦772.7 million, a 174.2% growth from ₦281.8 million recorded in FY 2021.
• Operating loss of ₦1.3 billion in FY 2022 relative to ₦281.8 million operating profit recorded in FY 2021 was due to the greater growth in total expenses (35.5% YoY) relative to gross earnings growth of 10.3% YoY.
• Profit before income tax declined to ₦823.0 million in FY 2022 from ₦2.4 billion in the corresponding period in 2021 due to the growth in finance costs.
• Profit after income tax decreased by 68.9% to ₦688.5million from ₦2.2 billion in FY 2021 resulting in a significant decline in profit after tax margin to 9.3% from 33.1% recorded in FY 2021.
• Total assets expanded by 50.7% to ₦57.1 billion from ₦37.9 billion as of year-end 2021, driven primarily by 101.4% growth in investment in associates to ₦29.7 billion from ₦14.8 billion in December 2021 and a 57.4% growth in long-term investment securities to ₦16.3 billion from N10.4 billion in December 2021.
• Total liabilities recorded a 439.5% increase from N3.8 billion in FY 2021 to ₦20.3 billion as a result of ₦14.1 billion increased borrowings used to facilitate the increase in investment in select associates.
Consolidated Statement of Comprehensive Income
In millions of naira FY 2022 FY 2021
Revenue 6,170.4 5,777.1
Other income 1,329.2 1,021.7
Gross earnings 7,499.6 6,798.8
Personnel expenses (3,664.5) (3,239.7)
Depreciation and Amortisation (550.7) (494.1)
Operating expenses (2,508.2) (2,712.8)
Total expenses (8,827.4) (6,516.9)
Operating profit/(loss) (1,327.8) 281.8
Finance Cost (2,100.5) –
Profit/(Loss) before investee income (1,327.8) 281.8
Share of profit of equity accounted investees (net of income tax) 2,150.8 2,119.4
Profit before minimum taxation 823.1 2,401.2
Minimum tax – (6.9)
Profit before income tax 823.1 2,394.3
Income tax expense (124.6) (146.1)
Profit for the year 698.5 2,248.2
Other comprehensive income:
Items that are or may be reclassified to profit or loss
Other comprehensive income, net of tax 1,994.5 589.4
Total comprehensive income for the year 2,693.0 2,838.1
Earnings per share
Basic and diluted (Naira) 0.35 1.13
Consolidated Statement of Financial Position
In millions of naira FY 2022 FY 2021
Cash and cash equivalents 4,749.7 2,248.2
Trade and other receivables 1,064.7 1,658.3
Intercompany receivables – –
Prepayment 592.5 460.6
Investment securities 621.6 3,986.5
Total current assets 7,028.4 8,353.6
Investment securities 16,330.1 10,373.5
Investment in associates 29,711.2 14,750.6
Investment in subsidiaries – –
Property and equipment 3,827.4 4,209.3
Intangible assets 90.4 181.9
Right-of-use asset 75.5 0.0
Defined benefit plan asset 0.2 0.0
Total non-current assets 50,034.8 29,515.3
Total assets 57,063.2 37,868.9
LIABILITIES
Other liabilities 5,286.8 2,498.6
Term borrowings 14,079.0 0.0
Income tax liabilities 93.9 224.7
Lease Liabilities 26.0 222.6
Retirement benefit obligation – –
Total current liabilities 19,485.6 2,946.0
Retirement benefit obligation 125.7 164.0
Provisions 405.7 405.7
Deferred tax liability 238.9 238.9
Total non-current liabilities 770.3 808.6
Total liabilities 20,255.9 3,754.6
EQUITY
Share capital 1,102.3 982.1
Other reserves 3,973.8 1,988.4
Retained earnings 31,731.2 31,143.9
Total equity 36,807.3 34,114.4
Total liabilities and equity 57,063.2 37,868.9
Glossary of terms
Operating profit margin is operating profit divided by gross earnings.
EBITDA margin corresponds to EBITDA divided by gross earnings.
EBITDA is Gross earnings less operating costs.
EBIT is calculated as EBITDA subtracted by finance cost, depreciation, and amortization.
Profit before tax margin corresponds to profit before tax as a % of gross earnings.
Return on equity corresponds to profit/(loss) for the period divided by average total equity.
Return on average assets corresponds to operating profit divided by average equity.
