Nigerian Exchange Group Plc (“NGX Group” or “The Group”) announced its audited results for the financial year ended 31 December 2022
Group Financial Highlights
| Income statement | |||
| In millions of naira | Dec-22 | Dec-21 | % Change |
| Revenue | 6,170.4 | 5,777.1 | 6.8% |
| Other income | 1,329.2 | 1,021.7 | 30.1% |
| Gross earnings | 7,499.6 | 6,798.8 | 10.3% |
| Personnel expenses | (3,664.5) | (3,239.7) | -13.1% |
| Operating expenses | (2,508.2) | (2,712.8) | 192.5% |
| EBITDA | 1,323.4 | 775.9 | 70.6% |
| Depreciation and Amortization | (550.7) | (494.1) | -11.4% |
| EBIT | 772.7 | 281.8 | 174.2% |
| Interest expense on borrowings | (2,100.5) | – | |
| Total expenses | (8,827.4) | (6,516.9) | -35.5% |
| Operating (loss)/Profit | (1,327.8) | 281.8 | -571.1% |
| Share of profit-equity accounted investees | 2,150.8 | 2,119.4 | 1.5% |
| Profit before income tax | 823.0 | 2,401.2 | -65.7% |
| Profit /(loss) for the year | 698.5 | 2,248.2 | -68.9% |
| Balance sheet | |||
| In millions of naira | Dec-22 | Dec-21 | % Change |
| Cash and cash equivalent | 4,749.7 | 2,248.2 | 111.3% |
| Long-term investment securities | 16,330.1 | 10,373.5 | 57.4% |
| Investment in associates | 29,711.2 | 14,750.6 | 101.4% |
| Property, plant and equipment | 3,827.4 | 4,209.3 | -9.1% |
| Total assets | 57,063.2 | 37,868.9 | 50.7% |
| Total equity | 36,807.3 | 34,114.4 | 7.9% |
| Total liabilities | 20,255.9 | 3,754.6 | 439.5% |
| Key ratios | Dec-22 | Dec-21 | % Change |
| Returns on average equity (ROAE) | 2.0% | 6.6% | -70.1% |
| Return on average assets (ROAA) | 1.6% | 0.7% | 118.7% |
| EBITDA margin | 17.6% | 11.4% | 54.6% |
| Operating profit margin | -17.7% | 4.1% | -527.1% |
| Profit after tax margin | 9.3% | 33.1% | -71.8% |
Commenting, Mr. Oscar N. Onyema OON, the Group Managing Director/Chief Executive Officer, said:
“NGX Group continued to bed-down its operations post demutualization 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% increase in Earnings before Interest, Taxes, Depreciation and Amortization (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 maximize 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”.
Group Financial Performance Review
- Nigerian Exchange Group achieved a year-on-year (YoY) growth of 10.3% 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 (82.3% of gross earnings) and an impressive 30.1% increase of other income.
- Revenue grew by 6.8% to N6.2 billion from N5.8 billion driven largely by the 51.2% growth in treasury investment income to 2.0 billion (FY 2021: N1.3 billion). Transaction fees which accounted for 51.2% of revenue also increased by 9.0% YoY to N3.2 billion (FY 2021: N2.9 billion).
- Growth in treasury investment income (32.9% of revenue) to N2.0 billion 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 9.0% growth in transaction fees (51.2% 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 (12.6% of revenue) grew by 1.3% 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 (1.6% of revenue) earned from NGX Real Estate lease of office floor spaces recorded a 19.8% 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 84.2% to N109.0 million from N689.9 million.
- Growth recorded by the Group in other income was driven by a 47.2% increase in market data income to N581.4 million from N395.0 million:
- Income of N93.7 million from technology accounted for 7.1% of other income. o A 1.6% 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 35.5% 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 (41.5% of total expenses) also grew by 13.1% to N3.7 billion (FY 2021: N3.2 billion) while operating expenses which accounted for 28.4% of total expenses fell by 7.7% to N2.5 billion from N2.7 billion in FY 2021.
- EBITDA grew by 70.6% to N1.3 billion from ?775.9 million recorded in FY 2021. This emanated from the 7.8% marginal growth in gross earnings over operating costs.
- EBIT for FY 2022 was N772.7 million, a 174.2% growth from N281.8 million recorded in FY 2021.
- 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 (35.5% YoY) relative to gross earnings growth of 10.3% YoY.
- Profit before income tax declined to N823.0 million in FY 2022 from N2.4 billion in the corresponding period in 2021 due to the growth in finance costs.
- Profit after income tax decreased by 68.9% to N688.5million from N2.2 billion in FY 2021 resulting in a significant decline in profit after tax margin to 9.3% from 33.1% recorded in FY 2021
- Total assets expanded by 50.7% to N57.1 billion from N37.9 billion as at year end 2021, driven primarily by 101.4% growth in investment in associates to N29.7 billion from N14.8 billion in December 2021 and a 57.4% growth in long-term investment securities to N16.3 billion from N4 billion in December 2021.
- Total liabilities recorded a 439.5% increase from N8 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.
Nigerian Exchange Group will on Thursday, 9 March 2023, by 3pm (WAT), host a conference call for investors and analysts to discuss the Audited Financial Results for the year ended December 2022. Interested participants can register at http://bit.ly/ngxg-fy22-inv-call.