In what may be a sign of investor displeasure with its audited financials for half-year ended June 30, 2022, the share price of Access Holdings Plc On Wednesday lost 20 kobo or 2.2%, same as the dividend proposed by the directors after the numbers showed that gross earnings ran faster than net profit which stayed flat at 2.21% above previous numbers.
The poor net profit growth resulting from the significant drop in Profit before tax from its Nigerian operations from N59.348bn last year, to N23.018bn, was made worse by the decision of the board to cut the interim dividend from 30 kobo paid in the corresponding period of last year to 20 kobo this time around. The interim dividend is payable on October 12, 2022, to shareholders whose names appear on the register of members as of the close of business on Wednesday, September 28, 2022.
It is noteworthy that the group restated its 2021 half-year audited numbers.
Specifically, Access Holdings reported gross earnings growth of 31% to N591.80bn, compared to previous half-year’s N450.30bn, while profit after tax crawled from N86.82bn in 2021 to N88.74bn, after interest expenses soared by 46.07%, among others. Net profit, therefore, translated to N2.52 Earnings Per Share, compared to t the preceding half-year’s N2.48 each.
According to the result, interest income rose 22.51% to N372.304bn from N319.092bn, N53.212bn or 16.67%, while interest expense jumped to N174.802bn from N119.667bn, after the group paid N108.635bn on customer deposits, from N56.773bn. This resulted interest income of N197.502bn, down from the previous half-year’s N200.018bn; while net impairment charges jumped from N28.868bn to N36.863bn, leaving a net interest income after impairment charges of N160.639bn, compared to the N171.35bn reported in the corresponding period of last year.
Fee and commission income increased by 10.42% from N73.446bn to N81.1bn, arising from the drop in credit related fees and commissions from N20.855bn to N10.501bn; while account maintenance charge and handling commission rose to N12.042bn from N10.855bn; while commission on bills and letters of credit improved from N2.144bn to N3.033bn. Commissions on collections soared from N757m to N1.577bn; commission on other financial services rose significantly from N6.891bn to N12.655bn; commission on foreign currency denominated transactions rose marginally from N1.885bn to N1.947bn. Channels and other e-business income jumped also from N29.912bn to N38.861bn. Fee and commission expense leaped from N14.988bn to N25.662bn, representing an increase of 71.21%. Net fee and commission income, therefore dropped from N58.458bn to N55.438bn.
Net gains on financial instruments stood at N64.135bn, compared to the previous half-year’s N23.255bn loss; net foreign exchange gain dropped to N52.863bn from N68.195bn; net gain on fair value hedge stood at N11.282bn, against the loss of N4.22bn in the previous half-year. Other operating income dropped from N13.804bn to N10.029bn; bargain purchase from acquisition was nil value, compared to N2.64bn; depreciation remained flat at N14.948bn from N14.03bn; just as amortization and impairment at N6.747bn, from N6.022bn.
Other operating expenses also soared to N176.71bn from N126.04bn; following which profit before tax remained flat also at N97.791bn from N97.379bn. Income tax dropped marginal from N10.56bn to N9.052bn.
A breakdown of the financials showed that Nigeria contributed to the lion’s share of N493.772bn to gross earnings, compared to the previous N353.739bn; followed by N69.25bn from the rest of Africa, up from N64.033bn; while Europe added N28.781bn, a drop from N30.124bn in the 2021 half-year. The bulk of PBT, N62.796bn however, came from the rest of Africa, making it the most profitable, up from the N22.823bn in the corresponding period of 2021. Access Holding’s Nigerian operation could only contribute N23.018bn to PBT for the period, a significant drop from N59.348bn; followed by the N11.977bn from the group’s European operations, which also fell from N15.325bn.
Total assets grew by 12.51% from N11.731tr to N13.199tr; the bulk of which remained the customer loans and advances at N4.619tr; up from N4.161tr; while total liabilities improved by 13.53% to N12.127tr from N10.681tr, lifted by customer deposits of N7.839tr, which was 12.72% better than the previous N6.954tr.