VFD Group dividend income surge amid weak macro conditions

VFD Group’s dividend income has surged 689 percent amid a challenging business environment during the nine months of 2023.

The firm’s dividend income increased to N1.76 billion in 9M’2023 from N222.74 million in the same period of 2022.

“Due to the time lag between investments and recognition of investment income, our performance did not fully reflect the inherent strength of the balance sheet and the potential of the entire ecosystem,” Nonso Okpala, GMD/ CEO of VFD Group Plc said in a note.

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He stated that despite a challenging economic environment marked by high interest rates, rising inflation, and Naira depreciation, VFD Group is dedicated to adapting and excelling.

Profit after tax for the period dropped to N681.97 million in 9M’2023 from N5.36 billion in a similar period in 2022.

“Our profitability for the period was impacted by the following: Naira depreciation from N447 to N767 (71.85%), which increased the cost of the hedge instruments we used to address exchange volatility on our forward transactions and had a significant impact on interest expense,” the CEO of VFD Group said.

“Unprecedented inflation and the rising cost of doing business in the country impacted our operating costs as well. During the review period, we also made new investments, the benefits of which could not be recognised immediately, but which would manifest with significant upsides in the coming quarters, which is the crux of our unique business model,” he said.

VFD Group was admitted to the daily official list of the Nigerian Exchange Limited (NGX) which provides the company with a gateway to access more capital and more visibility to the investing public.

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“We seek to raise almost immediately N12.5 billion via rights,” the firm’s CEO said at the Facts Behind the Listing ceremony which held at the Nigerian Exchange building in Lagos.

The firm’s other income dropped to N4.39 billion in 9M’2023 from N4.64 billion in the same period of 2022.

Investment and similar income increased to N22.21 billion from N18.73 billion while investment and similar expense also increased to N18.74 billion from N12.8 billion.

The firm’s revenue increased to N29.03 billion in 9M’2023 from N23.59 billion in the same period of 2022.

“We recorded total revenue of N29.0 billion during the last quarter, a 23 percent increase over the same period last year. This increase can be attributed to dividend income and treasury-related income,” Okpala, GMD/ CEO of VFD Group said.

Depreciation and amortisation increased to N667.63 million in 9M’2023 from N569.14 million in the same period of 2022.

Net cash generated by operating activities stood at a positive cash flow of N21.08 billion in 9M’2023 from a negative cash flow of N6.74 billion in the same period of 2022.

Net cash used in investing activities stood at N5.1 billion in 9M’2023 from N16.47 billion in the same period of 2022.

The firm’s net cash used in financing activities stood at N7.4 billion in 9M’2023 from N23.94 billion in the same period of 2022.

VFD Group’s cash and cash equivalents at the end of the period increased to N11.47 billion from N4.61 billion during the period.