How Elections and the Naira Crisis Affected 2023 Revenue – NGX
The recent general elections and the Central Bank of Nigeria’s currency redesign strategy, according to the Nigerian Exchange Group (NGX), both had a detrimental effect on top-line income.
According to the report, this caused first-quarter revenue of N1.67 billion in 2022 to fall by 20.5% to N1.33 billion in the first quarter of 2023.
Its unaudited results for the first quarter ending March 31, 2023, disclosed this.
According to the company, it saw “A 14.2% year-over-year fall in gross earnings to N1.56 billion (Q1 2022: N1.82 billion), led by a 20.5 percentage point decline in sales during a period of significant economic and socio-political insecurity. However, other income increased by 57.7%, making up for the revenue decline.
The last general election, the CBN’s attempt to phase out Nigeria’s older higher denomination banknotes, and other factors all contributed to a 20.5% decline in the Group’s top-line income.
Transaction fees, which made up 51.5% of income, decreased by 30.6% YoY to N685.9 million (Q1 2022: N988.1 million), according to the NGX, as a result of less commercial operations.
It revealed that treasury investment income, which made up 31.1% of revenue, fell to N414.7 million in the first quarter of 2023 from N520.5 million in the same period the previous year. This decline was primarily caused by relatively lower yields on the Group’s treasury investment portfolio as a result of unfavourable market conditions and uncertainty surrounding the general election.
However, the Group saw a surge in listing fees of 44.6%, from N123.9 million in Q1 2022 to N179.2 million in Q1 2023.
The rise in domestic businesses’ need for listing services was what caused listing costs to rise.
Additionally, NGX Real Estate’s rental income, which accounts for 2.7% of total revenue, increased by 32.2% to N36.0 million in Q1 2023 from N27.2 million in Q1 2022.
Other costs, including trading floor rent, broker yearly fees, dealing licences, and membership, decreased by 1.2% to N16.5 million in Q1 2023 (from N16.9 million in Q1 2022).
Due to an enhanced percentage of profit-equity accounted investees and a decrease in finance costs, NGX Group’s profit before income tax expense climbed by 21.5% YoY to N412.2m in Q1 2023 from N339.2m in the same quarter in 2022.
