The Nigeria Energy Sector Fund (NESF) recorded a significant growth in earnings for the year ended March 2018, thanks to lower operating costs.
Earnings for the year ended March 2018 released on Tuesday showed profit after tax increased by 33.6 percent to N135.7 million compared to N101.6 million recorded in 2017.
The NESF is a closed-end investment vehicle that was created in 1998 for the purpose of bridging the funding gap in the energy sector of the Nigerian economy through the mobilization of investment funds from individuals and corporate investors, both indigenous and foreign.
The fund is also able to invest in equities and fixed income instruments.
According to the fund manager, SCM Capital Asset management, “The significant performance of the fund despite the drop in the yields of most money market instruments, was as a result of the ingenuity of the fund manager not only to reduce the diminution to N18.81 million as at March 2018 from N62.03 million in March 2017, but also to exit the bond securities without any loss compared to a loss of N21.98 incurred in previous year.”
During the period, operating expenses declined by 61.45 percent to N39.29 million in 2018 from N101.9 million recorded in 2017.
This was largely driven by a reduction in diminution from N62.03 million to N18.81 million.
NESF has grown its earnings by an average of 8 percent in the last five years, recording its lowest earnings in 2015 after profit after tax fell 61.5 percent to N35.37 million.
Investors were however compensated with higher dividend as dividend per share increased simultaneously as earnings grew.
Dividend per share stood at N136, the highest in the last five years.
Retained earnings during the period increased by 19.6 percent to N363.8 million from N304.2 million recorded in 2017.
Meanwhile, total market value of NESF rose marginally by 5.7 percent to N1.10 billion from N1.05 billion in 2017.
