United Capital’s total assets hit N1.3trn on investments

United Capital’s total assets rose by 39.6 percent from the start of 2024, marking a N332 billion increase in nine months of 2024 compared to the end of 2023, BusinessDay analysis shows.

The firm’s third-quarter (Q3) 2024 financials revealed that its total assets rose to N1.3 trillion from N931.9 billion on the back of higher disposal of investment securities and increased proceeds from borrowings.

Further analysis shows that the disposal of investment securities rose to N139.4 billion from N50.9 billion under cash flow from investing activities while proceeds from borrowings grew to N183.6 billion in Q3 2024 from N109.7 billion in FY 2023 through cash flow from financing activities.

However, investment income declined to N8.4 billion in nine months from N8.9 billion due to higher interest expenses on managed funds and other borrowings which rose to N68.7 billion from N37.9 billion.

This indicates that the firm is incurring significant costs due to interest payments on money it has borrowed.

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Its shareholders’ fund during the reviewed period also rose to N115 billion from N90.7 billion, driven by the fair value reserves of N79.8 billion from N55.3 billion, thereby indicating that the assets or investments held by the company have increased in terms of their market value or fair value assessment.

Net cash generated by/(used in) operating activities declined to N90.4 billion from N146.8 billion in FY 2023, indicating that the cash generated from its core business activities and daily operations declined.

This, in turn, impacts its working capital. Net cash generated by or used in investing activities amounted to N113.9 billion, while net cash used in financing activities stood at negative N98.9 billion.

Cash and cash equivalents at the end of the period amounted to N415.8 billion from N144.4 billion.

The firm’s after-tax profit rose to N15.9 billion from N8.5 billion while profit before tax grew to N18.7 billion from N9.7 billion year-on-year.

Its gross earnings grew by 61 percent to N28.2 billion from N17.5 billion. Also, total revenue rose to N28.2 billion from N17.5 billion, with total expenses increasing to N11.14 billion from N8.3 billion in Q3 2023 as the cost of doing business in Nigeria surged in the face of inflation.

According to the National Bureau of Statistics, inflation rose to 32.7 percent in September 2024 from 32.15 in August 2024.

United Capital’s total comprehensive income for the period soared to N34.9 billion, driven by N37.2 billion in other comprehensive income from fair value gains on equity and debt instruments.

Fees and commission income increased to N10.5 billion from N5.7 billion, and other income rose to N6.3 billion from N941.5 million, driven by exchange gains of N4.9 billion in the period under review from N154.7 million.