The Nigerian Exchange Group Plc (NGX Group) has announced its audited financials for full year (FY) ended December 31, 2022.
NGX Group achieved a year-on-year (YoY) growth of 10.3percent in gross earnings to N7.5 billion in FY 2022 from N6.8 billion reported in FY 2021.
This double-digit growth in the top line was because of the persistent growth in revenue (82.3percent of gross earnings) and an impressive 30.1percent increase of other income.
Commenting on the financials, Oscar N. Onyema, Group Managing Director/Chief Executive Officer,
NGX Group said, “NGX Group continued to bed-down its operations post demutualisation and restructuring. Despite the economic headwinds affecting the country, as demonstrated by our year end results, we have continued to create lasting value.
“Our top-line expansion drove a 70.6 percent increase in Earnings before Interest, Taxes, Depreciation and Amortisation (EBITDA) in 2022. In the same year, the Group leveraged its strong equity position and strategically increased its investment in an associate company in order to drive growth, boost efficiency and further maximise overall shareholder value.”
“However, the bottom-line operating performance slipped mainly due to the interest expenses resulting from borrowing to fulfil the strategic acquisition mentioned above. Our growth will be driven by deepening value creation in subsidiaries and expansion into adjacent businesses. As an organisation, we remain committed to becoming Africa’s preeminent integrated market infrastructure group,” he said.
Revenue grew by 6.8percent to N6.2 billion from N5.8 billion driven largely by the 51.2percent growth in treasury investment income to 2billion (FY 2021: N1.3 billion).
Transaction fees which accounted for 51.2percemt of revenue also increased by 9percent YoY to N3.2 billion (FY 2021: N2.9 billion).
Growth in treasury investment income (32.9percemt of revenue) to N2billion in FY 2022 relative to N1.3 billion in FY 2021 was driven largely by relatively higher yields on the Group’s treasury investment portfolio owing to improved yields on treasury bills, bonds and fixed deposit instruments.
A 9 percent growth in transaction fees (51.2percent of revenue) to N3.2 billion in FY 2022 from N2.9 billion recorded in FY 2021 was driven by improved trading activities in Nigerian Exchange Limited.
Listing fees (12.6percent of revenue) grew by 1.3percent to N774.7 million in FY 2022 from N754.9 million in FY 2021 driven primarily by a relatively higher listing of corporates on the Exchange in the year ended 2022 compared to the same period in 2021.
Rental income (1.6percent of revenue) earned from NGX Real Estate lease of office floor spaces recorded a 19.8percent increase to N99.2 million in FY 2022 from N82.8 million recorded in FY 2021.
Other fees which represent rent of trading floor, annual charges from brokers, dealing licences and membership fell by 84.2percent to N109 million from N689.9 million.
Growth recorded by the Group in other income was driven by a 47.2percent increase in market data income to N581.4 million from N395 million: Income of N93.7 million from technology accounted for 7.1percent of other income.
A 1.6percent growth in other operating income made up of sublease income and penalty fees resulted to N635.4 million (FY 2021: N625.5 million).
Total expenses grew by 35.5percent to N8.8 billion from N6.5 billion in FY 2021 primarily driven by interest expense on borrowings recorded as N2.1 billion.
Personnel expenses (41.5percent of total expenses) also grew by 13.1percent to N3.7 billion (FY 2021: N3.2 billion) while operating expenses which accounted for 28.4percent of total expenses fell by 7.7percent to N2.5 billion from N2.7 billion in FY 2021.
Earnings before Interest, Taxes, Depreciation and Amortisation (EBITDA) grew by 70.6percent to N1.3 billion from N775.9 million recorded in FY 2021. This emanated from the 7.8percent marginal growth in gross earnings over operating costs. EBIT for FY 2022 was N772.7 million, a 174.2percent growth from N281.8 million recorded in FY 2021.
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Operating loss of N1.3 billion in FY 2022 relative to N281.8 million operating profit recorded in FY 2021 was due to the greater growth in total expenses (35.5percent YoY) relative to gross earnings growth of 10.3percent YoY.
Profit Before Income tax (PBT) declined to N823million in FY 2022 from N2.4 billion in the corresponding period in 2021 due to the growth in finance costs.
Profit After Income tax (PAT) decreased by 68.9percent to N688.5million from N2.2 billion in FY 2021 resulting in a significant decline in profit after tax margin to 9.3percent from 33.1percent recorded in FY 2021.
Total assets expanded by 50.7percent to N57.1 billion from N37.9 billion as at year end 2021, driven primarily by 101.4percent growth in investment in associates to N29.7 billion from N14.8 billion in December 2021 and a 57.4percent growth in long-term investment securities to N16.3 billion from N10.4 billion in December 2021.
Total liabilities recorded a 439.5percent increase from N3.8 billion as at FY 2021 to N20.3 billion as a result of N14.1 billion increased borrowings used to facilitate the increase in investment in select associates.
