1 United Capital Reports Flat Q3 Profit Growth, As Expenses Rise By 35.6% – Invest Data

United Capital Reports Flat Q3 Profit Growth, As Expenses Rise By 35.6%

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Post Views: 1,351 United Capital Plc, on Friday presented its unaudited financials for the nine-month ended September 30, 2017, showing that growth in...

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United Capital Plc, on Friday presented its unaudited financials for the nine-month ended September 30, 2017, showing that growth in gross earnings and profit was slow, hampered by the 35.6% rise in total expenses, a situation that may impair dividend payment at the end of this year.
Gross earnings rose by N549.089m or 9.65% to N6.236bn, up from N5.689bn in the corresponding nine-month of 2015; helped particularly by the rise in investment income from N688.237m to N1.099bn.
Investment income represented revenue from fixed deposits for both periods; just as fee and commission income was flat at N1.438bn, compared to the previous N1.428bn. Of this amount, financial advisory fees dropped to N717.737m from N889.888m; while other fees and charges jumped from N538.836m in the nine-month of 2016, to N720.477m. Net interest income soared to N92.437m from N14.558m; just as net interest margin fell to N2.846bn from N3bn; bringing net operating income to N5.476bn from N5.132bn, as interest income on managed funds reduced to N6.351bn from N7.258bn; as interest expense on managed funds remained negative, but improved from N4.258bn to N3.505bn.
Other income rose to N752.316m from N559.09m, comprising dividend on equity investment which dropped to N248.04m from N319.401m, other interest income, which soared from N186,000 to N442.614m; while other income slumped from N239.503m to N71.663m. Net gains from financial assets held for trading stood at N76,000 from losses amounting to N1.85bn.
Personnel expenses rose to N653.117m from N501.186m, with staff cost increasing from N491.267m to N642.181m and contribution to defined contribution plan, which rose slightly to N10.936m from N9.919m. Other operating expenses stood at N1.609bn, the lion’s share of which was the N1.25bn that went into general administrative expenses, as against N1.162bn and N878.802m; depreciation and amortization rose to N78.907m from N62.4821m; resulting in total expenses of N2.341bn, representing a N614.778m or 35.6% growth.
Profit before tax however dropped slightly to N3.897bn from N3.962bn; income tax expense declined from N792.557m to N623.535m; leaving net profit for the nine months at N3.273bn from N3.17bn, which translated to Earnings Per Share of 55 kobo; compared to 78 kobo in the corresponding period of 2016.

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