eTranzact International: Positioned for robust performance
eTranzact International Plc migrated from first quarter (Q1) loss of 2020 to positive earnings in its unaudited financial statements first quarter (Q1) results ended March 31, 2021, attributable to decline cost of sales and total operating expenses.
The company was prudent in managing its non-core business transactions in the period under review that also contributed to profits.
eTranzact International recorded a non-core business income of N24.3million in Q1 2021.
The Nigeria’s premier payment processing Platform Company on the Nigerian Exchange Limited (NGX) main board in the period has shown steady performance in profit & loss figures and balance sheet which is expected to translate into dividend payout to shareholders in months ahead.
The company in the Q1 2021 results has shown growth in some financial parameters to underlined steady recovery from 2020 financial year.
Specifically, the company reported N35.12million profit before tax in Q1 2021 from a loss before tax of N182.5million in Q1 2020 while profit for the period closed at N23.88million in Q1 2021 from a loss of N182.53million reported in Q1 2020.
Revenue reported in the period dropped by 12.1 percent to N5.18billion from N5.89billion reported in prior quarter results while cost of sales dropped by 16 percent to N4.74billion in Q1 2021 from N5.64billion reported in Q1 2020.
The interplay between revenue and cost of sales positioned gross profit by N444million in Q1 2021, 74 percent increase over N255.5million in Q1 2020.
As regards total operating expenses, eTranzact International reported about nine percent decline to N452.65million in Q1 2021 from N497.3million in Q1 2020.
The breakdown revealed that Selling and Marketing costs dropped by 21 per cent to N4.79million in Q1 2021 from N6.06million in Q1 2020 while Administrative expenses also dropped by 8.8 percent to N447.9million in Q1 2021 from N491.2million in Q1 2020.
Finance Cost, thus, moved from N5.03million to N5.37million in Q1 2021 as investment income dropped by 62 percent to N24.48million in Q1 2021 from N64.3million in Q1 2020.
The company in the first three months of 2021 has increased its total assets by 42 percent, driven primarily by 101 increase in cash and cash equivalents to N7.3billion as at March 31, 2021 from N3.64billion in full year ended December 31, 2020.
Meanwhile, the company’s Total non-current assets closed unaudited March 31, 2021 at N1.53billion from N1.59billion reported in full year ended December 31, 2020 while total current assets gained 66percent to N8.58billion as at March 31, 2021 from N5.2billion reported in 2020.
Total liabilities closed the period at N8.24billion, 1.45 percent below N8.24billion in 2020.
With three percent decline in trade and other payables to N7.5billion as at March 31, 2021, total current liabilities closed at N7.74billion as at March 31, 2021 from N7.96billion reported in 2020.
Non-current liabilities rose by 25percent to N500million as at March 31, 2021 from N400.9million in 2020.
According to the company, “The loan of N500 million represents the first tranche of N150 million, the second tranche of N250 million and the third tranche of N100 million under the CBN’s Shared Agent Network Expansion Facility.
“The loan is to fund the expansion of Shared Agent Networks across Nigeria in order to deepen financial inclusion in Nigeria. The loan was fair valued using the effective interest rate and a deferred grant income was recognised as a result of the actual interest rate on the loan being lower than the effective interest rate.
“The loan has a tenor of 10 years (inclusive of 2 years principal moratorium and 1 year interest moratorium). The Company did not pledge any of its assets in securing the loan.”
Total equity attributable to owners of the company migrated from a loss of N1.58billion in 2020 to N1.87billion as at March 31, 2021.
In April, 2021, 2,434,566,483 ordinary shares of eTranzact were listed on the daily official list of the NGX.
The additional shares listed on the Exchange arose from the Company’s Rights Issue of 4,666,666,667 ordinary shares of 50 kobo each at N1.50 Kobo per share on the basis of 10 new ordinary shares for every nine ordinary shares held as at Wednesday, 25 March 2020. The Rights Issue was 52.17per cent subscribed.
With this listing of the additional 2,434,566,483 ordinary shares, the total issued and fully paid up shares of eTranzact has now increased from 4,200,000,000 to 6,634,566,483 ordinary shares of 50 kobo each.
eTranzact’s non-current assets amount to more than N2 billion. This includes property, plants, equipment, investment property, intangible assets and deposits for shares. This represents an 11.4% increase from over N1.8 billion recorded at the end of 2019.
Earnings forecast
eTranzact International has released its earnings forecast for the third second quarter (Q3) ending September 30th, 2021 at the NGX with a revenue of N5.926 billion up from N4.689 billion forecasted for Q2 2021.
The forecast projected a 389.59percent growth of profit after tax to N209.114 million compared with N42.712 million forecasted for Q2 2021.
About the company
eTranzact International was incorporated as a Private Limited Liability Company in 2003. It became a Public Limited Liability Company in 2009 and has since been quoted on The Nigerian Stock Exchange.
The majority shareholder is eTranzact Global, a company incorporated in British Virgin Islands, with a shareholding of 50.33percent while the remaining shareholding is held by diverse group of shareholders including institutional investors.
The Company is a payment technology provider principally engaged in the processing of all facets of electronic payment transactions using its switching platform. It also provides maintenance and software development services. The swithcing platform processes transactions across various channels which includes, – Mobile Phones (GSM, CDMA or Analog, Web (using any internet browser in a secured transaction), POS (Point of Sale), ATM (Automated Teller Machines), Other mobile devices and Bank branches.
