Africa Prudential Plc (NGX: AFRIPRUD) has reported its financial statements for the nine months period ended 30 September, 2022, posting a profit of N1.26bn, an 11.89% year-on-year growth from the N1.15bn it reported in 2021.
Commenting on the result, The Managing Director/CEO of Africa Prudential, Mr. Obong Idiong, had this to say:
“Our results remain a testament to the impact of our deliberate efforts at diversifying and strengthening our revenue lines to multiple income lines, innovating new ways to deliver value, and adopting cost efficiency in every facet of our operations. The 115% growth in digital technology income highlights the success of our switch to a technology-oriented business and we remain positive about the potential growth from this revenue stream in the medium to long term.
As we venture into the last quarter of the year, we will continue to deploy value to our customers leveraging innovation and technology to transform their experience and increase shareholders’ wealth.”
Analysis of Statement of Profit or Loss and Other Comprehensive Income
- Gross Revenue: From N2.44bn it reported in the 9 months (9M) period in 2021, AFRIPRUD grew this earning to N2.96bn, a 21.43% increase. The gross revenue comprised primarily of the Interest Income and Revenue from contracts with customers. The Interest income rose by 13.19% from N1.60bn to N1.81bn while the revenue from contracts rose by 37.23% from N0.83bn to N1.15bn. The bulk of the interest came from interest on loans and advances which was reported to be N1.69bn (9M 2021: N1.49bn). Amongst the revenue from contracts is income from Digital Technology Services, which continued to show strong growth, rising from N291.07mn reported in 9M 2021 to N627.07mn.
- Personnel expenses: The company spent N538.37mn on personnel, an 18.50% increase from the N454.54mn it spent in 9M 2021. N497.67mn of this expense was on wages and salaries, N18.36mn was on defined contribution plans and N13.78mn on medical expenses.
- Administrative expenses: N787.88mn was spent on administrative expenses, top amongst them being profession fees (N336.00mn) and internet and communication (N135.81mn).
- Profit before tax: AFRIPRUD posted a 19.41% growth in profit before tax; N1.60bn in 9M 2022, against N1.34bn in 9M 2021. The company went on to pay a total of N317.07mn in income taxation (9M 2021: N193.16mn).
- Profit after tax: The profit after tax grew from N1.34bn in 9M 2021 to N1.60bn in 9M 2022, an 11.89% increase.
- Earnings per share: AFRIPRUD posted an Earnings per Share of N0.64 in the 9 months period under review.
Analysis of Statement of Financial Position
- Cash and cash equivalents: The cash and cash equivalent held by AFRIPRUD as at 30 September 2022 shut-up 60.39% to N1.38bn when compared with what it had as at 31st December 2021, at the time it held N0.86mn.
- Total Assets: The company’s assets went up by 27.45%, from N15.76bn as at 31st Dec. 2021 to N20.09bn as at 30th September 2022. The highest component of the company’s asset is the N14.48bn of debt instruments at amortised cost (31 Dec. 2021: N10.90bn). Of these debt instruments; N8.81bn is on deposited with banks with maturity above 90 days, N4.36bn is on loans and advances while N1.23bn is on corporate bonds.
- Total Liabilities: The total liabilities rose by 58.13% to N11.05bn, from the N6.99bn liabilities on its books as at 31 Dec. 2021. The bulk of the liabilities came from deposits from customer, which itself rose by 59.17% from N6.19bn to N9.86bn. The deposits from customers primarily represent dividends, return monies and other interest received on behalf of clients.
- Shareholder’s fund: The shareholder’s fund increased marginally, growing by 3.00% from NN8.77bn to N9.03bn as at 30 September 2022.
- Retained earnings: The retained earnings, the major component of the Shareholder’s fund also increased marginally, growing by 4.10% to N7.36bn.
Analysis of Statement of Cash Flow
- Operating activities: AFRIRUD generated N4.97bn from its operating activities. In the preceding period, it used N449.40mn for the same activity.
- Investing activities: N3.44bn was used in investing activities, due primarily to the purchase of debt instrument. In 9M 2021, it generated N2.95bn.
- Financing activities: N1.00bn was used in financing activities, same as was used in the preceding year. This is primarily the N1.00bn paid to Shareholders as dividend.
About the Company
Africa Prudential Plc was originally incorporated as UBA Registrars Ltd in March 2006. The Company subsequently changed its name to Africa Prudential Registrars Plc in August 2011 and was listed on the Nigerian Stock Exchange in January 2013.
To expand its business portfolio, the Company acquired UAC Registrars Ltd in June 2013. To enhance its market competitiveness and diversified business interests.
The Company changed its name to Africa Prudential Plc following a special resolution passed by the Members in General Meeting on March 28, 2017.
Africa Prudential Plc carries on the business of registrar and investor relation service in accordance with its Memorandum and Articles of Association. As part of its business diversification strategy, it has expanded its business activities to provision of digital solutions for businesses.
Its flagship digital solutions product known as EasyCoop is a unique software to aid the administration of cooperative societies in Nigeria and other digital business solutions.
AFRIPRUD has 2 billion outstanding shares, and a market capitalization of N10.30bn.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur