2022: NGX Group Records N7.5 Billion In Gross Earnings

The Nigerian Exchange Group Plc (NGX Group), has recorded a 10.3 per cent rise to N7.5 billion in gross earnings in it’s financial year ended 31 December 2022.

The group financial statement of health, which was made public on Thursday, showed that rising from N6.8 billion in the corresponding year in 2021, the double-digit growth in the top line was due to
the persistent growth in revenue (82.3% of gross earnings) and an impressive 30.1% increase of other income.

However, Profit after income tax decreased by 68.9% to ₦688.5million from ₦2.2 billion in FY 2021 resulting in a significant decline in profit after tax margin to 9.3% from 33.1% recorded in FY 2021

Further x-ray of the NGX group performance revealed that revenue
grew by 6.8% to ₦6.2 billion from ₦5.8 billion driven largely by the 51.2% growth in treasury
investment income to 2.0 billion (FY 2021: ₦1.3 billion).

Transaction fees which accounted for 51.2% of revenue also increased by 9.0% YoY to ₦3.2 billion (FY 2021: ₦2.9 billion).

Commenting, Mr. Oscar Onyema, the Group Managing Director/Chief Executive Officer, said: “NGX Group continued to bed-down its operations post demutualization and restructuring. Despite the economic headwinds affecting the country,as demonstrated by our year end results, we have continued
to create lasting value. Our top-line expansion drove a 70.6% increase in Earnings before Interest, Taxes,
Depreciation and Amortization (EBITDA)in 2022.In the same year, the Group leveraged its strong equity position and strategically increased its investment in an associate company in order to drive growth, boost efficiency and further maximize overall shareholder value. However, the bottom-line operating performance slipped mainly due to the interest expenses resulting from borrowing to fulfil the strategic acquisition mentioned above. Our growth will be driven by deepening value creation in subsidiaries and expansion into adjacent businesses. As an organisation, we remain committed to becoming Africa’s preeminent integrated market infrastructure group”.

Other financial highlights shows that:

1. Growth in treasury investment income (32.9% of revenue) to ₦2.0 billion in FY 2022 relative
to ₦1.3 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.

2. A 9.0% growth in transaction fees (51.2% of revenue) to ₦3.2 billion in FY 2022 from ₦2.9
billion recorded in FY 2021 was driven by improved trading activities in Nigerian Exchange
Limited.

3. Listing fees (12.6% of revenue) grew by 1.3% to ₦774.7 million in FY 2022 from ₦754.9 million
in FY 2021 driven primarily by a relatively higher listing of corporates on the Exchange in the
year ended 2022 compared to the same period in 2021.

4. Rental income (1.6% of revenue) earned from NGX Real Estate lease of office floor spaces
recorded a 19.8% increase to ₦99.2 million in FY 2022 from ₦82.8 million recorded in FY
2021.

5. Other fees which represent rent of trading floor, annual charges from brokers, dealing licences
and membership fell by 84.2% to ₦109.0 million from ₦689.9 million.

6. Growth recorded by the Group in other income was driven by a 47.2% increase in market data income
to ₦581.4 million from ₦395.0 million:
7. Income of ₦93.7 million from technology accounted for 7.1% of other income.

8. A 1.6% growth in other operating income made up of sublease income and penalty fees
resulted to ₦635.4 million (FY 2021: ₦625.5 million).

9. Total expenses grew by 35.5% to ₦8.8 billion from ₦6.5 billion in FY 2021 primarily driven by interest
expense on borrowings recorded as ₦2.1 billion. Personnel expenses (41.5% of total expenses) also
grew by 13.1% to ₦3.7 billion (FY 2021: ₦3.2 billion) while operating expenses which accounted for
28.4% of total expenses fell by 7.7% to ₦2.5 billion from ₦2.7 billion in FY 2021.

10. EBITDA grew by 70.6% to ₦1.3 billion from ₦775.9 million recorded in FY 2021. This emanated from the 7.8% marginal growth in gross earnings over operating costs.

11. EBIT for FY 2022 was ₦772.7 million, a 174.2% growth from ₦281.8 million recorded in FY 2021.

12. Operating loss of ₦1.3 billion in FY 2022 relative to ₦281.8 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% YoY.

13.Profit before income tax declined to ₦823.0 million in FY 2022 from ₦2.4 billion in the corresponding period in 2021 due to the growth in finance costs.

14. Total assets expanded by 50.7% to ₦57.1 billion from ₦37.9 billion as at year end 2021, driven primarily by 101.4% growth in investment in associates to ₦29.7 billion from ₦14.8 billion in December 2021 and a 57.4% growth in long-term investment securities to ₦16.3 billion from N10.4 billion in December
2021.

15.Total liabilities recorded a 439.5% increase from N3.8 billion as at FY 2021 to ₦20.3 billion as a result of ₦14.1 billion increased borrowings used to facilitate the increase in investment in select associates.