• Thursday, June 13, 2024
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BusinessDay

Multiverse grows liquid assets by 323% to wade off economic uncertainties

Multiverse grows liquid assets by 323%  to wade off economic uncertainties

Multiverse Mining and Exploration plc, a mining company in Lagos have recorded 323 percent growth in cash and cash equivalent at the period ended June 2023 to N5.07 million from N1.2 million in the same period of 2022.

For Multiverse, having cash provides sufficient funds for companies to honour both short- and long-term obligations to creditors, magnify the earnings of owners by way of steady dividend payment, and pursue expansion plans such as making inroads into products or chains of business.

Cash equivalents are investment securities that are meant for short-term investing; they have high credit quality and are highly liquid.

Analysts can also estimate whether it is good to invest in a particular company through its ability to generate cash and cash equivalents since they reflect how a company can pay its bills throughout a short period.

The movement of cash and cash equivalents that come in and go out of a company is summarised in the cash flow statements of these firms. The main components of these include operating activities, investing activities, and financing activities.

BusinessDay analysis reveals that the company’s growth in cash and cash equivalents signifies that it can turn its assets into cash.

Further analysis of the movement in Multiverse Mining and Exploration plc’s cash and cash equivalents showed the net cash flow from operating activities stood at N121.4 million in the first half of 2023, a 62.1 percent increase from N74.9 million in the similar of 2022.

The firm’s net cash flow from investing activities stood at N9.2 million negative cash flow in June 2023 from 3.6 million negative cash flow in June 2022.

Net cash flow used in financing activities stood at N108.9 million negative cash flow in the first half of 2023 from N72.8 million negative cash flow in the same period of 2022.

Multiverse’s profit after tax grew 43.4 percent to N80.9 million in the first half of 2023 from N56.4 million in the first half of 2022.

The company which specialises in solid minerals recorded a 13 percent increase in revenue to N283.74 million in the period which ended in June 2023 from 251.6 million in the similar period of 2022.

Read also: eTranzact grows profit after tax by 157.8%

At the beginning of the year, out of 159 publicly quoted companies on the board of the Nigerian Exchange Limited (NGX), Multiverse Mining and Exploration Plc led the best-performing stocks in 2022.

During the period, the mining company saw its share price surge by over 1,890 percent in 2022. Specifically, a unit of share of the company was worth 20 kobos as of the end of 2021 and closed the year at N3.98 as of December 30, 2022.

On the back of rising inflation, Multiverse’s cost of sales stood at N59.8 million in the period which ended in June 2023, a 260 percent increase from N16.6 million in June 2022.

The firm’s administrative/operating expenses dropped 21 percent to N71.1 million in the period which ended in June 2023 from N90.2 billion in the period which ended in June 2022.

Multiverse’s trade and other payables amounted to N470.5 million in June 2023, 1.8 percent decline from N478.9 million in December 2022.

The firm’s finance costs amounted to N48.5 million in June 2023, a 22 percent decline from N62.2 million in December 2022.

Total borrowings stood at N2.43 billion in June 2023, a 34.3 percent decline from N3.7 billion in December 2022.

Basic earnings per share stood at 0.19 kobo from 0.13 kobo in the comparable periods.

Multiverse Mining and Exploration Plc (formerly Multiverse Resources Plc) is an exploration and mining company in Nigeria licensed to extract zinc, copper, gold, lead, tantalite, tin, and barite ores.

Findings by BusinessDay showed Nigeria is gradually tapping from a cash-spinning mining sector that has remained largely under-utilised since the crude oil boom, a development that is part of a key step in efforts to pivot the economy away from oil.

Data gleaned from the National Bureau of Statistics (NBS) showed Nigeria exported nonmonetary gold (including gold plated with platinum) in powder form to Switzerland valued at N14.39 billion in the first quarter of 2023.

Further findings showed Nigeria exported nonmonetary gold worth $61.6bn in 2022, the highest since NBS started collating data.

Experts said the government’s decision to relax regulations and offer tax breaks for the first three years of its operation is attracting miners to the country’s mining sector.