Q1, 2023: Custodian Investment’s N6bn financial asset losses gulp earnings

Custodian Investment Plc suffered a loss of N6.2 billion in financial asset values in the first quarter, which consumed more than one-half of net income and pressured the bottom line to a drop.

The company’s interim financial report for the first quarter ended March 2023 shows that a shift from a net fair value gain of about N1.2 billion in the same period last year to a huge loss sprang a major downside force in its earnings story in the first quarter.

The asset value losses for the first quarter already tower some 70 per cent above the closing figure of N3.7 billion for the entire 2022 financial year. The investment holding company continues to show an unstable record of the rise and fall in net fair value losses in recent years.

Profit performance continues to depend on whether the asset values are up or down. The company’s strength for a 111 per cent profit advance to N12.7 billion in 2020 came from a 270 per cent upsurge in asset value gains to N15.8 billion in the year.

The drop in profit to N10 billion in 2021 was induced by an upsurge in net fair value losses to N17.6 billion in the year.

The company’s ability to push up the bottom line to N11.2 billion in 2022 rested on a sharp drop of 79 per cent in net fair value losses to N3.7 billion at the end of the year. The final quarter profit boost that saved the 2022 full-year profit from dropping was delivered by slashing net fair value loss from over N6 billion at the end of the third quarter.

The current year is the upside of the up and down pattern of the company’s financial asset values and profit is therefore set in the downside direction.

The first quarter ended with an after-tax profit of N2 billion, which is 8 per cent down quarter-on-quarter from about N2.2 billion the company posted in the same period in 2022.

The drop in profit is against an increase of 19 per cent in gross earnings to N27.9 billion over the review period. This represents an increase of N4.5 billion in revenue, which failed to reach the bottom line.

Custodian Investment Plc suffered a loss of N6.2 billion in financial asset values in the first quarter, which consumed more than one-half of net income and pressured the bottom line to a drop.

The company’s interim financial report for the first quarter ended March 2023 shows that a shift from a net fair value gain of about N1.2 billion in the same period last year to a huge loss sprang a major downside force in its earnings story in the first quarter.

The asset value losses for the first quarter already tower some 70 per cent above the closing figure of N3.7 billion for the entire 2022 financial year. The investment holding company continues to show an unstable record of the rise and fall in net fair value losses in recent years.

Profit performance continues to depend on whether the asset values are up or down. The company’s strength for a 111 per cent profit advance to N12.7 billion in 2020 came from a 270 per cent upsurge in asset value gains to N15.8 billion in the year.

The drop in profit to N10 billion in 2021 was induced by an upsurge in net fair value losses to N17.6 billion in the year.

The company’s ability to push up the bottom line to N11.2 billion in 2022 rested on a sharp drop of 79 per cent in net fair value losses to N3.7 billion at the end of the year. The final quarter profit boost that saved the 2022full-year profit from dropping was delivered by slashing net fair value loss from over N6 billion at the end of the third quarter.

The current year is the upside of the up and down pattern of the company’s financial asset values and profit is therefore set in the downside direction.

The first quarter ended with an after-tax profit of N2 billion, which is eight per cent down quarter-on-quarter from about N2.2 billion the company posted in the same period in 2022.

The drop in profit is against an increase of 19 per cent in gross earnings to N27.9 billion over the review period. This represents an increase of N4.5 billion in revenue, which failed to reach the bottom line.