eTRANZACT International Plc has posted a loss of N72.6 million for the period ended September 2020 – a 15.3% decline.

This is according to its latest financials sent to the Nigerian Stock Exchange market today.

Key highlights of the 2020 9M financials include:

• Revenue declined to N5.45 billion, down by -16.1% Y-o-Y.
• Both Loss Before Tax and Loss After Tax deteriorated to a loss of N72.6 million, up by +15.3%.
• Cost of sales declined to N5.17 billion, down by -15.3% Y-o-Y.
• Gross profit declined to N281.7 million, indicating a loss of 28.1% Y-o-Y.
• Administrative expenses declined to N492.1 million, down by -0.5% Y-o-Y.
• Investment income declined to N31.33 million, indicating a decrease of -48.4% Y-o-Y.
• Finance cost decreased to N5 million, down by -42.8% Y-o-Y.
• Property, plant and equipment increased to N667.9 million, up by +20.1% within the period under view.
• Total assets grew to N6.95 billion, up by +2.8% within the period under view.

What you should Know

eTRANZACT International Plc has been battling to recover since the scandal that rocked the company in 2018, the same year it posted a loss of N268 million. By Q2 2019, the firm seemed to have overturned the deficit, posting a profit of N96.09 million.

However, since the beginning of the year, the firm had subsequently recorded a loss in both quarters of the year. These losses seemed to have eroded the gains made by the firm in 2019.

Tantalizers Plc, a leading fast-food company in Nigeria, has disclosed that it suffered a pre tax loss of N245million between January 1st and September 30th, 2020.

This is according to the information contained in its unaudited financial statement for the period ended 30 September 2020, which was sent to the floor of the Nigerian Stock Exchange today.

Key highlights of its 2020 9M results

• Revenue was N655.93 million, compared to N1.26 billion it generated same period in 2019.
• Cost of Sales was N355.44 million, compared to N729.71 million it incurred same period in 2019.
• Other income was N114.94 million, compared to N268.27 million it made same period in 2019.
• Administrative Expenses was N606.19 million, compared to N940.90 million it incurred same period in 2019.
• Operating loss was N189.30 million, compared to operating profit of N127.05 million.
• Finance cost was N55.70 million, compared to N94.40 million it paid same period in 2019.
• Loss before tax was N245.00 million, compared to profit after tax of N22.17 million it made same period in 2019.

Operational review

The on-trade-channel of the leading fast-food company with over 60 restaurants across Nigeria as of 30th April, 2017 was severely affected by the COVID-19 pandemic, as the widespread economic vulnerabilities in the nation disrupted the business segment of the company.

The lockdown and the restriction placed on businesses operating in the on-trade-market affected the on-premise demand and sales of these companies, which led to decline in the sales and net revenue of Tantalizers Plc.

However, the core business segment of Tantalizers was not the only segment affected, as other revenue-generating segments like Rent, advertisement and franchising declined over this period.

Analysis of Custodian Investment Plc’s 2020 Q3 results revealed that investment in stocks rescued the company from reporting a loss in 2020 Q3. The company would have made a loss if not for gains on quoted investment stocks.

The company had operated poorly in the period under consideration. Even though gross revenues had increased by 42% to N22.5 billion and other investment and operating income by 47% to N19.8 billion in the period under consideration; the 97% increase in operating expenses to N23.8 billion eroded the gains.

The pressure on its gross margins was due to higher payment of claims leading to an underwriting loss of N4 billion for the quarter. underwriting losses year to date is now N5.6 billion.

Summarily, it was the significant rise in the net fair value gains on quoted investments that delivered the company, so that it recorded increased pre-tax, post-tax profits, and Earnings Per Share in the period under consideration. The net fair value gains on quoted investments surged from N503.5 million loss in the same period last year to N4.75 billion in the period under consideration.

Insurance company business models are hinged on investing premiums in fixed income securities or equities. Custodian’s investment in equities over fixed income securities paid off leading to the gain of N4.7 billion in Q3 alone. Year to date, gains on investments is N10.1 billion already surpassing the N5.2 billion gain it earned in the whole of 2019.

This has helped boost bottom line as pre-tax profits increased by 2.8% to N1.73 billion and Earnings Per Share increased by 9.1% to 24 kobo in the period under consideration.

In line with Custodian Investment Plc’s strategy to diversify its financial service offerings, the company, on 30 September 2016, invested in the equity of Interstate Securities Limited, a stockbroking firm and a dealing member of the Nigerian Stock Exchange.
The investment is made up of 321,626,098 ordinary shares representing 46.9% of the company’s issued ordinary shares and 82,500,000 5% Convertible Preference shares.

What you should know

Nairametrics recently reported that Custodian Investment Plc had agreed to buy a majority stake in UPDC. The report indicated that the company planned to acquire a 51% stake in UPDC, a real estate company.

The company noted that it believes the deal will provide Custodian with a platform to capture arising real estate opportunities. It also immediately provides recurring cash flow visibility and attractive yields as a result of its direct exposure to Nigeria’s leading real estate investment trust (“UPDC REIT”) — with a track record of profitability and annual dividend distribution, which offers a good compliment for our product portfolio.