Sunday, April 14, 2024

Strong earnings propel stocks higher, NGX reports 20.2% growth in Q3 2023


The Nigerian capital market closed the month of October in the green as bullish sentiment prevailed on the last day of trading in the month to propel the Nigerian Exchange Limited benchmark index, the NGX All-Share Index advancing by 1.65 percent to settle at 69,236.19 points, the highest point since September 19.

The rally was buoyed by impressive scorecards by corporate as well as announcements of corporate actions.

Consequently, the year-to-date gain of the index rose by 30.09 percent, with 40 gainers outnumbering the 25 losers posted on Tuesday.

As a result, the NGX market capitalisation increased by N617.79 billion to close at N38.04 trillion.

Specifically, stocks such as AIRTELAFRI, CADBURY, NNFM, CHAMS and ABCTRANS which posted 10.00; 9.92; 0.92; 9.90; and 9.72 percent each were the toast of investors.

Analysis of Tuesday market activities showed there was an improvement with an uptick of 4.85 percent in total deals and 12.29 percent increase in volume, resulting to 8,027 trades and 483.27 million units; however, the total value plummeted by 26.80 percent to N6.04 billion.

JAPAULGOLD emerged as the most actively traded stock, with 155.59 million shares worth N181.86 million changing hands in 411 deals.

Across sub-sector gauge, performance remained bullish as the Banking, Insurance and Industrial Goods sectors closed in the green zone increasing by 0.94 percent, 1.87 percent and 0.09 percent respectively. While the Consumer Goods sector declined by 0.02 percent, the Oil/Gas sector remained unchanged from the previous session.

Meanwhile, the NGX on Tuesday announced its financial results for the nine-month ended September 30, 2023 posting 20.2 percent growth in earnings.

According to the report, the Group’s earnings for the first nine months rose in value to N6.86 billion from N5.71 billion as of September 2022. Revenue surged by 19.6 percent to reach N5.95 billion, up from N4.97 billion in September 2022, influenced by a decrease of 5.9 percent in treasury investment income, constituting 24.2 percent of the revenue, resulting in N1, 442.2 million.

This is down from N1, 533.1 million during the same period in 2022, attributed to a reduction in our naira-denominated investment instruments.

Further analysis shows a robust trading activity on the NGX led to 33.2 percent growth in transaction fees, which contributed 60.8 percent of the revenue during the period, to N3, 615.3 million.

Similarly, a 25.5 percent boost in listing fees contributed N705.8 million representing 11.9 percent of revenue.

Rental income from NGX Real Estate’s office spaces rose by 37.4 percent to N106.9 million. Other fees, however, saw a 9.8 percent decrease, tallying up to N79 million.

Other incomes, representing 13.3 percent of gross earnings, expanded by 24.5 percent. This growth was fuelled by a 28.8 percent enhancement in Market data income (54.6 percent of other income) at N499.2 million. A 22.4 percent increment in other operating income (36.3 percent of other income) which amounted to N331.8 million.

Total expenses for the period saw a marginal 2.6 percent reduction to N6.43 billion. This change was primarily driven by a rise of 13.2 percent in operating expenses to N1.86 billion. A spike in finance costs associated with a term loan facility. A notable 21 percent downturn in personnel expenses, leading to a figure of N2.27 billion.

The operating profit showcased a striking turnaround with an increase of 148.9 percent, registering N435.3 million. This contrasts with the loss of N890.8 million noted in September 2022. Profit before income tax experienced a 313 percent increase, culminating in N1.92 billion of profit.

This was propelled by the improved revenue and contained personnel expenses. After-tax profit soared by 606 percent to N1.22 billion, with the after-tax margin now standing at an impressive 17.77 percent.

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