eTranzact International Plc’s 147.40 percent surge in half year results means impressive as the banking and payment services company continues to be resilient amid the tough operating environment post election year.
Profit was N165.58 million in June 2015, compared with N66.93 million the previous year, the Lagos-based company said in an e-mailed statement on the Website of the NSE. Sales increased 16.01 percent to N2.07 billion.
The company has been consistently recording double digits growth in revenues and profits since 2014, this performance compared with other players in the industry that succumbed completely to headwinds.
Analysts say the stellar performance will increase investor appetite for the company’s stock given its consistent earnings growth.
However, eTranzact’s cost of sales reacted to the challenging environment as it increased by 5.79 percent to N1.46 billion in 2015 as against N1.38 billion the previous year.
The rising production costs is crimping growth of most firms in Africa largest oil producer as they struggle with the devaluation of the naira that made imported raw materials expensive.
The devaluation of the naira also exposes technology companies to currency risk as hard and software become expensive since they are imported.
eTranzact’s cost of sales margin reduced to 72.22 percent in 2015 from 79.22 percent last year. This means the company is spending less to produce to produce each unit of products.
Gross profit increased by 54.30 percent to N555.69 million compared with N360.13 million the previous year. Gross profit margin moved to 27.50 percent in 2015 as against 20.60 percent last year.
The improved margins means the company is efficient in managing direct costs attributable to projects.
Net margin, measure of profitability and efficiency jumped to 8.19 percent in 2015 as against 3.82 percent in 2014.
eTranZact has partnered MasterCard, a technology company in the global payments industry to make international remittance services available to millions of consumers in Nigeria.
Under the agreement, citizens will be able to securely receive international remittances into their eTranzact mobile money wallets or select bank accounts through the international transfer hub, HomeSend.
eTranzact, which is connected to and switches transactions for all of Nigeria’s major commercial banks, will also enable millions of consumers to receive remittances directly into their bank accounts.
The company has uitilized the resources of its owners in generating higher profit as return on equity (ROE) increased to 3.27 percent in 2015 as against 1.43 percent the previous. Total assets rose by 8.58 percent to N5.06 billion.
eTranzact share price closed at N3.33 on the floor of the exchange while market capitalization was N13.98 billion
BALA AUGIE
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