Africa Prudential Posts 24 Percent Decline in Profit for H1 2021

African Prudential Plc, a digital technology business provider in Nigeria, has reported a 24 percent decline in profit after tax to N830 million in the period ended June 30, 2021.

The company stated in its unaudited financial statements released on Friday. Below is a year-on-year comparison between the first half of 2021 and the first half of 2020.

Income Statement:

• Revenue from contracts with customers: N0.52 Billion, compared to N0.59 Billion in HY 2020 (12% YoY Decline);
• Interest Income: N1.15 Billion, compared to N1.28 Billion in HY 2020 (10% YoY Decline);
• Gross Earnings: N1.67 Billion, compared to N1.87 Billion in HY 2020 (11% YoY Decline);
• Profit Before Tax: N0.97 Billion, compared to N1.22 Billion in HY 2020 (20% YoY Decline);
• Profit After Tax: N0.83 Billion, compared to N1.08 Billion in HY 2020 (24% YoY Decline);
• Earnings Per Share: 41kobo. (54kobo in HY 2020)

Balance Sheet:

• Total Assets: N88.87 Billion, compared to N17.73 Billion as at FY 2020 (401% YTD Increase);
• Total Liabilities: N80.71 Billion, compared to N9.36 Billion as at FY 2020 (762% YTD Increase);
• Shareholders’ Fund stood at N8.16 Billion, a 2% YTD decline from N8.37 Billion as at FY 2020.

Comparing HY 2021 to HY 2020, we observed the following key items worthy of note:

• Revenue from contracts with customers: During the period under review, Revenue from contracts with customers contracted by 12% year-on-year on the back of a significant renegotiation of fees rate by customers along our corporate actions revenue lines as well as slow sign off of contracts within the period in digital consultancy. However, revenue from register maintenance increased by 8%.

• Interest income: While the company was bullish with 436% increase in the interest realized from bonds and also a 193% increase in the interest realized from short term deposits, there was a slight 10% year-on-year decline in interest income owing to a 4% decline in interest on loans and advances and a nil income on T-Bills relative to HY 2020.

• Profit After Tax: On account of the business considerations around revenue and operating cost, PAT dereased by 24% year-on-year. Comparing HY 2021 to FY 2020, the following were observed in the Balance Sheet:

• Total Assets: In the second quarter of 2021, the total assets increased 401% on the back of 7336% surge in cash and cash equivalents as well as an 70% increase in trade and other receivables.

• Total Liabilities: The company total liabilities increased by 762% Year-till-date driven by a 829% increase in customers’ deposits which accounted for about 99% of the company’s liabilities.

• Shareholder’s Wealth: Due to slight drop in earnings, total equity marginally declined by 2% year-to-date.