The rapid investment in innovative products, combined with market penetration, has catapulted the revenue of E Tranzact International plc, a dominant player in the Nigerian real-time and on-line business, analysis of its financial statement shows.
For the first nine months through September 2014, the company’s revenue increased by 61.5 percent to N5.19 billion from N3.22 billion in the same period of the corresponding year (Q3) 2013.
The company was also able to translate top-line impressive performance to bottom-line growth as profit after tax (PAT) surged by 177.97 percent to N218.71 million in Q3 2014, compared with N78.68 million in the preceding year.
E-Tranzact is tapping into the Nigeria robust economy and its rising middle-class with the introduction of market penetrating products like the mobile money solution called the pocketmoni 500.
The company had already announced it would be investing as much as $350 million in the money projects, which will be piloted in the North and South Western Nigeria.
Analysts have attributed the company’s stellar performance to its huge investment in mobile money activities.
An analysts interviewed, who preferred to remain anonymous, said E-Tranzact has to cut costs to boost profit margin as input costs are quite high.
The company’s cost of sales jumped by 62.8 percent to N4.07 billion in Q3 2014, from N2.50 billion the preceding year, while cost of sales margin remained flattish at 78 percent. Operating expenses were up by 23.02 percent to N814.06 million in the review period as against N661.71 million last year.
Net margin, which measures the profitability and efficiency of a firm moved to 4.20 percent in Q3 2014, as against 2.40 percent last year, while operating expenses ratio reduced to 15.68 percent from 20.51 percent the preceding year.
Current ratio, which measures the ability of a firm to meet its short-term obligation as at when due was 1.83x, below the 2.1x industry average.
E-Tranzact’s total assets were up by 11.13 percent to N4.39 billion in the review period, representing an increase of 11.14 percent from N3.95 recorded last year.
The telecoms and information services sector contributed 8.68 percent to the Nigerian economy equivalent to N6.97 trillion ($44.3bn) out of the total rebased GDP estimate of N80.22 trillion ($510bn).
E-Tranzact’s share price closed at N2.32 on the floor of the NSE on Tuesday, while market capitalisation was N9.77 billion.
