2018: TWO BLOWS TO UNITED CAPITAL PLC.

When a child who in a previous examination scored 80%, comes home with a new report in which he now scores 67.2%, the parents have a right to sit him down and ask how come.

So it must be between Nigeria's United Capital Plc and its discerning shareholders since the release of the company's 2018 audited figures.

In 2018, all said and done, says the annual report, United Capital ended with 67.2 % profit margin compared to 80.2% in 2017. How come?

What comes across from the figures was that the company received 2 blows to the jugular in 2018: Sharp drops in Investment income and fair value gain.

Investment income dropped by 10.8% to N4422.8m from N4965.2m while fair value on financial assets plunged by 79.7% to N6.173m from 2017's N30.387m.

In view of both drops, the group's gross earnings grew by only 33.9% to N9259.4m despite strong growths in net trading income, and net operating income leap to N757.5m from N143.5m 

Other income streams ended with single digit increase. Fee and commission rose by 4.99% to N1904m; and Other income increased by 8.96% to N2042.4m.

One more thing, United Capital ended the year without impairment provision, instead it had write back increase by 21.8% to N266.7m which helped in the counter to the blows to the jugular.

However, single digit growths in expenditure ensured that the group posted increased profit but not good enough to grow the bottom line.

Personnel cost rose by 4.46% to N1638.97m from N1568.97m while other operating expenses increased by 5.21% to N1550.2m from N1473.5m.

In the end, from 33.9% growth in gross earnings, United Capital reported 12.1% increase in profit before tax to N6221.2m from N5547.8m resulting in the dive in bottom line recorded.

UNITED CAPITAL PLC Full year Nm
                                   2018.           2017
Gross earnings.     9259.4.       6915.5
Investment inc.      4422.8.       4965.2
Fee& Comm.           1904.0.       1813.5
Net trading income. 757.5.          143.5
Other income          2042.4.       1874.5
Fair value gain.            6.173.       30.387
Personnel cost.      1638.97.     1568.97
Other Op expenses1550.2.       1473.5
Write back.                266.7.         219.0
Profit before tax.    6221.2.       5547.8
Profit margin %         67.2.           80.2

Comments

Post a Comment

Popular posts from this blog

NAIROBI SE's HIGH PRICED EQUITIES.

In the wake of Nigeria's high priced quoted companies posted in this blog a while ago, Henates took a look to at Nairobi Securities Exchange June 23 official list to identify its high priced equities and the outcome was interesting too. Of the 66 companies quoted on the market by June 23, 15 or 22.7% were valued averagely at above 30 times nominal value. A word of caution though: There are two clear differences between the Nigerian stock market list and that of Nairobi: In the Nigerian one most listed companies have par or nominal value of N0.50 as is there is an implied agreement on this. On the other hand, at Nairobi most of the equities do not share common par value, they differ greatly. Then another thing, Nigerian equities are not valued below par, Nairobi ones can and many are so valued. Of the top 15 high priced equities at the Nairobi market, Safaricom topped with because by June 23, at 23.25 Ksh average price, it was valued 465 times its nominal value of just 0.0...
Read more

NIGERIAN TRADE SURPLUS DOWN 29.6% 2ND QUARTER

The Nigerian economy that emerged recently very marginally from recession seems to be heading to its old self destructing ways again. According to 2016 second quarter trade statistics released by the National Bureau of statistics today, September 13, Nigerian's trade surplus dropped by 29.6% to N506.5bn compared to N719.4bn in the first quarter. This occurred as imports grew by 13.5% to N2295.5bn and exports rose by only 3.2% to N3102bn making total trade to grow by 7.7% as driven purely by imports growth. Compared to second quarter of 2016, however, imports grew by only 9.97% while exports rose by 73.48%. Imports grew in double digit on Q1 more because import of solid minerals jumped by 1527.4% within the same perios,; of energy products rose by 177.77%; raw materials by 17.4% and of Agricultural products by 16.01%. On the other hand, export growth was weaker as exports of solid minerals dropped by 27.5%; of manufactured goods declined by 17% and of agricultural products by 1.03%....
Read more