NGX Group grows H1 transaction fees by 198.4% to N2.320bn
...as gross earnings rise by 138.3% to N4.2bn
Nigerian Exchange Group Plc (NGX Group) has announced its unaudited results for the half year (H1) ended June 30, 2022.
Group Financial Performance Review
Gross earnings recorded a significant growth of 138.3percent to N4.22 billion from N1.77 billion as of June 2021 benefitting primarily from a 140.4percent growth in revenue (91percent of gross earnings), and 119.6percent growth in other income (9percent of gross earnings).
Revenue growth of 140.4percent (N2.23 billion) to N3.82 billion in June 2022 from N1.58 billion recorded in June 2021 was driven by: 165.1percent growth in treasury investment income (26.6percent of revenue) to N1.017billion in June 2022 relative to N383.7 million in the comparative period in 2021 driven largely by relatively higher yields on the Group’s treasury bills, bonds and fixed deposit investments; and 198.4percent growth in transaction fees (60.7percent of revenue) to N2.320billion in June 2022 from N777.7 million recorded in June 2021 due to a significant increase in trading activities in Nigerian Exchange Limited (NGX).
Commenting, Oscar N. Onyema, Group Managing Director/Chief Executive Officer, said: “In 2021, we took strategic steps to reorganise our business by laying the foundation for the rebirth of our franchise as we became a fully-fledged for-profit making company with a clear focus on maximizing resources and improving stakeholder returns. Our performance in the first half of 2022 is a testament to our ability to deliver long-term value. We recorded impressive growth in our top line to deliver a profit before tax of N1.22 billion despite the peculiar challenges inherent in our operating environment.
“Our goal remains to sustain our position as a leading integrated market infrastructure group in Africa, by diversifying our revenue streams, and identifying and investing in new businesses. We remain focused on building formidable businesses through broader and deeper involvement in every sphere of the capital market value chain through informed investments in profitable verticals and enhanced risk management practices, without losing sight of emerging opportunities in unrelated businesses within the Sub-Saharan African region”.
Revenue was also driven by 18.6percent increase in listing fees (9.5percent of revenue) to N363.8 million in June 2022 from N306.8 million in June 2021 buoyed by improved listing on the Exchange in the first half of 2022 relative to the first half of 2021.
Other details show: Rental income (1.4percent of revenue) earned from NGX Real Estate lease of office floor spaces recorded a 60.5percent increase from N32.2 million in June 2021 to N51.7 million; 15.4percent decline in other fees (1.8percent of revenue) to N69.7 million in June 2022 from N82.4 million in June 2021 which represents rental income from the trading floor, annual charges from brokers, dealing license and membership fees earned by the Group.
The record 119.6percent increase in other income (9percent of gross earnings) was driven primarily by: 376.5percent improvement in market data income (56percent of other income) to N220.94 million from N46.3 million reported in June 2021 which is made up of technology income, other sub-lease income, and penalty fees; and 15.99percent growth in other operating income (31percent of other income) from N105.6 million in June 2021 to N122.5 million in June 2022.
Total expenses grew by 102.6percent from N1.9 billion in June 2021 to N3.9 billion in June 2022 primarily driven by a 231.6percent growth in operating expenses (59.1percent of total expenses) to N2.3 billion from N702.9 million in June 2021. This was largely as a result of a finance cost (57percent of operating expenses) of N1.3 billion related to a term loan taken during the period. Personnel expenses (34.4percent of total expenses) also grew by 27percent from N1.01 billion in June 2021 to N1.35 billion during the period under review.
It recorded operating profit of N273.2 million in June 2022 from an operating loss of N177.2 million in June 2021, as a result of 138.3percent growth in gross earnings; profit before income tax grew by 134.4percent to N1.22 billion in June 2022 from N521.9 million in the corresponding period in 2021 due to an impressive growth in the top line which was more than sufficient to mitigate the impact of the increases in key expense lines.
Despite an increase in effective tax rate to 32.95percent relative to 13.84percent in June 2021, profit after income tax grew by 82.4percent to N820.2 million from N449.7 million. This resulted in a decline in profit after tax margin to 19.45percent from 25.42percent recorded in June 2021.
Total assets rose by 59.9percent to N39.8 billion from N24.9 billion in Dec. 2021, driven primarily by 91.3percent growth in investment in associates to N31.99 billion from N14.8 billion in Dec. 2021, and 116.8percent growth in Cash and Cash equivalent to N4.3 billion from N2.2 billion in Dec. 2021.
Total liabilities recorded a 394.7percent increase from N3.8 billion in Dec. 2021 to N18.6 billion as a result of a N14.5 billion term loan used to facilitate the increase in investment in select associates.