BY BAMIDELE FAMOOFO
Nigerian Exchange Group achieved a year-on-year (YoY) growth of 10.3 percent 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 percent increase of other income.
Revenue grew by 6.8 percent to N6.2 billion from N5.8 billion driven largely by the 51.2 percent growth in treasury investment income to 2.0 billion (FY 2021: N1.3 billion). Transaction fees which accounted for 51.2 percent of revenue also increased by 9.0 percent YoY to N3.2 billion (FY 2021: N2.9 billion).
Growth in treasury investment income accounts for 32.9 percent of revenue, increasing 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.
The bourse recorded a 9.0 percent 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 percent to N774.7 million in FY 2022 from N754.9 million in FY 2021 was 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 percent 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 percent to N109.0 million from N689.9 million. Growth recorded by the Group in other income was driven by a 47.2 percent increase in market data income to N581.4 million from N395.0 million: Income of N93.7 million from technology accounted for 7.1 percent of other income.
A 1.6 percent 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 percent 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 percent to N3.7 billion (FY 2021: N3.2 billion) while operating expenses which accounted for 28.4 percent of total expenses fell by 7.7 percent to N2.5 billion from N2.7 billion in FY 2021. EBITDA grew by 70.6 percent to N1.3 billion from N775.9 million recorded in FY 2021. This emanated from the 7.8 percent marginal growth in gross earnings over operating costs.
EBIT for FY 2022 was N772.7 million, a 174.2 percent 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 percent 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 percent 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 percent to N57.1 billion from N37.9 billion as at year end 2021, driven primarily by 101.4 percent growth in investment in associates to N29.7 billion from N14.8 billion in December 2021 and a 57.4 percent growth in long-term investment securities to N16.3 billion from N10.4 billion in December 2021.
Total liabilities recorded a 439.5 percent 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.