United Capital Reports Sluggish Half-Year Earnings, Profit Growth

The management of investment banking group, United Capital Plc, on Thursday submitted its unaudited financials for the half-year ended June 30, 2018, showing flat earnings and profit growth, after a decline in investment income that may not be unconnected with the bearish nature of the Nigerian stock market in the period under review.
Gross earnings stood at N3.881bn from N3.876bn, after investment income dropped from N2.015bn to N1.774bn, representing a N241.474m or 11.98%, as income from investment in securities declined to N1.168bn from N1.406bn. Fee and commission income rose by N88.202m or 10.47% to N930.349m from N842.147m; after financial advisory fees suffered a drop from N433.246m to N228.76m; as other fees and charges ballooned to N701.357m from N408.901m.
Net trading income jumped up N65.943m or 119.31% from N55.27m in the corresponding period of 2017, to N121.213m; just as net interest margin dropped from N300.947m to N272.85m.
Other income rose to N758.496m, up from N649.323m; while net gains on financial assets at fair value through profit rose to N24.009m, compared to the previous N12.821m.
Total expenses for the period was contained at N1.487bn, down from N1.498bn, the bulk of which was other operating expenses that fell to N726.203m from N809.247m, with other administrative expenses was the bulk of N696.665m, down from N789.763m; followed by personnel expenses which remained flat at N633.696m, as against the N636.904m.
Profit before tax therefore rose marginally to N2.393bn from N2.377bn; while income tax expense at N382.966m left net profit for the period at N2.01bn; which was slightly better than the previous N1.997bn.
Other comprehensive income for the period, net of taxes rose to N1.827bn from N1.389bn; bringing total comprehensive income to N3.838bn, compared to N3.386bn in 2018, translating to earnings per share of 34 kobo, from 33 kobo.
A statement by the company to the NSE said the earnings and profit were despite a challenging macroeconomic environment.
“In spite of higher oil prices, GDP growth came in slower than expected in Q1-2018 as activities in the services sector of the Nigerian economy continue to constrain overall growth,” the company said.
It added that the situation was made was by events in the global space which reversed the pace of foreign portfolio inflow into the local market, amid rising interest rates in the U.S and increased trade tension.
The statement quoted Peter Ashade, Group Chief Executive of United Capital as saying the company “continues to pursue a clear and consistent strategy, which will always deliver a strong performance for shareholders, and we remain positive about our future opportunities within the Nigerian and African market, notwithstanding the challenging macro-economic environment.”