Africa Prudential Plc Records 6% PAT decline in Q3 2020

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Africa Prudential Plc announced its Unaudited Financial Statements for the period ended September 30th 2020, with a Gross Earnings of N2.63 Billion and Profit Before Tax of N0.42 Billion. The Company delivered an Earnings Per Share of 71Kobo.

Commenting on the result, The Managing Director/CEO of Africa Prudential, Mr. Obong Idiong, had this to say:

“While the negative economic impact of the Covid-19 continues to reflect on our traditional income lines, the transition of the company from a traditional Registrar Business to a technology business deploying technology to transform the Registrar, Cooperative, E-Commerce, and Digital Technology play could not have come at a better time. We are confident that as the Company’s new businesses continue to gather momentum, we will continue to deliver sustainable value to our investors.”

Africa Prudential Plc Records 6% PAT decline in Q3 2020 Brandspurng1
Managing Director/CEO of Africa Prudential, Mr. Obong Idiong | www.brandspurng.com

“Among the gradual result of the transformation process is the 263% year-on-year growth in Digital Technology Consultancy income. We also grew our investment income by 6% year-on-year through and the efficient allocation of investmentible fund despite the prevailing low-interest rate regime.”

“We will continue to consolidate on our gains in the digital technology space to deliver great value and exceptional experience to clients across all our touch points.”

A year-on-year comparison between Q3 2020 and Q3 2019 reveals the following:

  • Revenue from contracts with customers: N0.86 Billion, compared to N1.22 Billion in Q3 2019 (30% YoY Decline);
  • Interest Income: N1.77 Billion, compared to N1.67 Billion in Q3 2019 (6% YoY Increase);
  • Gross Earnings: N2.63 Billion, compared to N2.90 Billion in Q3 2019 (9% YoY Decline);
  • Profit Before Tax: N1.57 Billion, compared to N1.76 Billion in HY 2019 (11% YoY Decline);
  • Profit After Tax: N1.41 Billion, compared to N1.50 Billion in Q3 2019 (6% YoY Decline);
  • Earnings Per Share: 71kobo, compared to 75kobo in Q3 2019.

Balance Sheet:

  • Total Assets: N19.38 Billion, compared to N18.65Billion as at FY 2019 (3.9% YTD Growth);
  • Total Liabilities: N11.11 Billion, compared to N10.37 Billion as at FY 2019 (7.2% YTD Increase);
  • Shareholders’ Fund stood at N8.27 Billion, marginally declining by 0.2% YoY from N8.28 Billion as at FY 2019.
Read Also:  Despite Challenges, Top Banks Sustain Profitability
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Africa Prudential Plc Records 6% PAT decline in Q3 2020 Brandspurng

Comparing Q3 2020 to Q3 2019, we observed the following key items worthy of note:

  • Revenue from contracts with customers: During the third quarter of the year 2020, the company’s fees from corporate actions grew by 25.79%, register maintenance grew by 47.49% and revenue from digital technology consultancy significantly increased by 264.63% year-on-year. However, there was a revenue decline from a fee from contracts by 30% year on year due to the impact of covid19 on our key clients which resulted in renegotiation and repricing.
  • Interest income: Despite the poor yield environment, Africa Prudential’s interest income increased by 6% year-on-year. This increase was fueled by 19.83% increase in interest income on loans and advances and a 780% increase in interest income on bonds. The total increase in interest income was achieved despite 45.94% reduction in interest income on treasury bills and 87.95% reduction in interest income on short-term deposits.
  • Profit After Tax: Overall, the profit after tax of Africa Prudential declined by 6% in Q3 2020. This result was on the back of the 29.61% reduction in revenue from contracts with customers, 5.4% reduction in other income, 3.4% increase in personnel expenses, and 17.2% increase in amortization of intangible assets.
Read Also:  Africa Prudential Plc. Announces Change in the Date of Board Meeting

Comparing Q3 2020 to FY 2019, the following were observed in the Balance Sheet:

  • Total Assets: Africa Prudential’s total assets during the period under review grew by 3.9% year-to-date on the account of a 7.3% rise in its debt instruments assets computed at amortised cost, 141.0% rise in trade and other receivables and 13.6% surge in intangible assets during the year.
  • Total Liabilities: The company’s total liabilities increased by 7.2% year-to-date, owing to 5.3% increase in its customer’s deposits and 2,106.8% rise in creditors and accruals owing to withholding tax payable on client dividend.
  • Shareholder’s Wealth: Due to 121.9% increase in fair value reserve, the Shareholder’s wealth mildly declined by 0.2% year-to-date.
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Africa Prudential Plc Records 6% PAT decline in Q3 2020 - Brand SpurAfrica Prudential Plc Records 6% PAT decline in Q3 2020 - Brand Spur

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