• Tuesday, May 28, 2024
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Inside NGX Group’s annual report, accounts for year 2022

Domestic, foreign portfolio equities transactions hit N346.23bn in April

The shareholders of Nigerian Exchange Group Plc (NGX Group) will this Friday, July 14 gather in Lagos for the 62nd Annual General Meeting (AGM) of the holding company where they will among other ordinary and special businesses of the day be presented with the audited financial statements (AFS) for the year ended December 31, 2022, and the reports of the board and the auditors thereon.
In the audited financial statement made available to stakeholders and the investing public ahead of the annual general meeting, the NGX Group said it remains committed to reducing expenses and safeguarding its financial position.

With over 60 years of being the leading exchange hub in Nigeria, the Nigerian Exchange Group Plc post demutualisation has maintained its leadership position in Africa’s financial market through its wholly-owned subsidiaries – NGX, NGX REGCO, and NGX RELCO.

Looking ahead, it will implement stricter expense policies, optimise taxes, and maximise returns from its capital investments to mitigate the risks of economic downturn and high inflation in 2023.

The NGX Group is confident in its ability to drive growth and create value for stakeholders and remains dedicated to transforming Nigeria and Africa’s capital markets.

The board chairman speaks
Umaru Kwairanga, Chairman of the Board, Nigerian Exchange Group said, “Looking ahead, 2023 offers promising opportunities for our economy. We have already made considerable progress by establishing strategic partnerships with prominent institutions. Our goal is to expand the reach of the capital market, improve financial literacy, facilitate capital raising for entrepreneurs, and streamline the listing process in the Nigerian capital market.”

He said, “to ensure this, we are committed to attracting global talent and providing our team with the necessary support to enhance their skills and productivity. Given the increased risks in the global financial and geopolitical landscape, we have amplified our internal control processes to monitor, identify, and mitigate these risks, while focusing on long-term growth potential. In the future, we will continue to fortify our corporate governance infrastructure for efficiency and effectiveness”.

As chairman, Kwairanga said one of his key priorities is to establish an effective succession plan that not only builds a robust board but also cultivates a talented pool of potential successors for CEO and executive management roles.

“Achieving an efficient capital mix and broadening our access to capital remain fundamental to our mission. The Board will continue supporting the Management team in addressing long-term risks, enhancing the global NGX brand, and evaluating progress in alignment with our ambitions to become Africa’s preferred exchange hub,” he noted.

Asides from being a holding company, NGX Group also administers post-trade, clearing, unlisted stocks, money markets services, etc, through its other investee companies: NG Clearing, CSCS, OTC platforms and FinTech Companies. Today, the subsidiary companies have been the strong pillars of the Group; the Nigerian Exchange Limited company is the highest contributor to the business in terms of revenue generated. However, the other two subsidiary companies still play critical roles in the overall Group’s performance.

After achieving a remarkable milestone …CEO says not seeking renewal of the employment contract on expiration in March 2024

“We are proud to have generated multiple income streams that enabled us to overcome the economic headwinds of the year,” said Oscar N. Onyema, Group Managing Director/ Chief Executive Officer, Nigerian Exchange Group Plc.

According to the CEO, “In 2022, the NGX Group achieved a remarkable milestone as a publicly listed corporation and holding company with a diversified portfolio of subsidiaries, associates, and investee enterprises. Our multi-asset business platform is designed to generate multiple income streams for the parent company from our portfolio of investee companies.

“At the core of our mission is creating value for our stakeholders, and we are proud to have achieved this substantially through our primary subsidiary, NGX Exchange (NGX). The Exchange leveraged various sources, including listing, licensing, and transaction fees to continue driving revenue growth and value creation.

“We are also pleased to have generated significant dividend payments from Central Securities Clearing System Plc (CSCS), one of our two Associate companies. We worked with relevant stakeholders to enhance dividend upstreaming to our non-operating holding company as well as maximise income from our treasury portfolio,” he added.

Read also: NGX RegCO, ICAN sign MoU to enhance market regulation, investor protection

The 2022 results

Despite a challenging economic environment, the NGX Group demonstrated remarkable resilience in 2022, achieving a 10.3 percent increase in gross earnings to N7.5 billion. This performance reflects NGX Group’s commitment to driving growth in Nigeria and Africa’s capital markets through a diversified portfolio of companies.

The CEO noted that the Group’s total revenue grew primarily due to a 6.8 percent increase in revenue to N6.2 billion, and 30.1 percent increase in other income to N1.3 billion. The growth in revenue was further bolstered by a 51.2 percent increase in treasury investment income and a 9 percent increase in transaction fees. Total expenses rose by 35.5 percent to N8.8 billion, primarily due to interest costs on borrowed funds used for the NGX Group strategic acquisitions.

“We continue to work on expense management and reduction of outstanding loans. We remain focused on creating value for our stakeholders, as reflected in our Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) growth of an impressive 70.6 percent to N1.3 billion,” Onyema further said.

He noted that Nigerian Exchange Group Plc’s share of profit from associate companies, particularly CSCS, increased by 1.5 percent to N2.2 billion. “However, our profit for the year decreased by 68.9 percent to N688.5 million, leading to a significant decrease in profit after tax margin from 33.1 percent in FY 2021 to 9.3 percent. Despite this decrease, we remain committed to our long-term strategic objectives and confident in our ability to deliver value for our stakeholders.

“The NGX Group’s commitment to creating value for our stakeholders is also evident in our financial position. We reported a substantial growth of 50.7 percent in total assets to reach N57.1 billion, driven primarily by a significant increase of 101.4 percent in our investment in associates and 57.4 percent growth in long-term investment securities. Our total liabilities witnessed a 439.5 percent surge due to an additional borrowing of N14.1 billion, utilised to boost our investment in selected associates,” Onyema noted.

“Dear shareholders, let me start by expressing my profound gratitude to you for your trust and support over the years that I have spent at the helm of affairs of your company. This letter may be my last to you as GMD/CEO, because I have advised the board of directors that “I will not seek to renew my employment contract when it expires in March 2024. Between now and then, I intend to continue to serve you to the best of my ability, and to work with the board on succession arrangements,” he revealed.

NGX Group is optimistic about the opportunities ahead

NGX Group is optimistic about the opportunities and challenges that lie ahead. The Group is committed to leveraging its strengths and expertise to drive growth and value creation in Nigeria and across Africa’s capital markets. One of its top priorities is to continue supporting its operating subsidiaries, associates, and investee companies to deliver sustainable value creation.

“We will look to enhance our performance by continuously striving to optimize operations, increase revenue streams and expand our market reach. We are confident that these measures will enable us to build on the positive momentum we have achieved in recent years and drive growth in 2023 and beyond.

“Furthermore, we recognise the importance of remaining agile and responsive to changes in the business environment. As such, we are taking steps to streamline our debt and reduce interest expenses, as well as diversifying our revenue streams to mitigate risks and enhance profitability. We will also continue to invest in our digital capabilities to drive innovation and digitization in our operations and expand our reach to a wider audience.

“NGX Group is well-positioned to navigate the challenges as well as capitalise on the opportunities in 2023 and beyond. We are confident in our ability to deliver sustainable value creation for our stakeholders, and contribute to organic and inorganic growth in Nigeria and Africa’s capital markets,” Onyema said.