The five IT firms listed on the NGX collectively experienced a 832% increase in profits, with their pre-tax profits rising to N3.83 billion from a cumulative loss of N523 million posted in FY 2022.
The five firms are Ventures, NCR (Nigeria), Chams Holding Company, CWG Plc and eTranzact. Their profits were driven by payment services charges, licenses and low foreign exchange exposure, Nairametrics found.
Among the tech firms, Chams Holding Company saw the most significant percentage gain, experiencing a remarkable turnaround to report a pre-tax profit of N248.5 million, marking a staggering growth of 292.5% from the N129.1 million loss reported in 2022.
eTranzact emerged as the highest profit earner among the firms, posting a pre-tax profit of N3.20 billion.
In terms of net income, there was a cumulative 223.5% growth in 2023, with the five firms reporting a total profit after tax of N2.06 billion, a significant contrast to the N1.66 billion net loss reported in 2022.
Additionally, there was a 54.6% growth in revenue, with the firms collectively recording N70.84 billion in income in 2023, up from N45.81 billion in 2022.
A cursory look at the revenues of the different firms indicate that payment solutions provision was a major revenue source for them. For example, eTranzact recorded N33.68 billion in revenue from its switching and PSSP license, while Chams Holdco posted N2.86 billion in revenue from Chams core, Omatek, including from its payment collection service, Kegow, and the virtual airtime service.
The five IT firms also demonstrated impressive performance in the NGX in 2023. Their combined market capitalization soared by 141% over the year, increasing from N36.76 billion to N88.53 billion.
Omatek Ventures has been experiencing losses since 2012 until now. However, in 2023, the company reported its smallest net loss since 2014.
Chams Holdco experienced a remarkable 292.5% growth in pre-tax profit, reporting a pre-tax profit of N248.5 million in 2023, up from the N129.1 pre-tax loss posted in 2022. The group’s net income increased to N20.2 mmillion, marking a 105.4% growth from the N375.2 million net loss in 2022.
Chams Holdco was the second best-performing company on the NGX in 2023, with its share price appreciating by 795% to close at N1.97.
eTranzact International emerged as the highest profit earner in 2023, with a pre-tax profit of N3.20 billion, representing a 98.6% growth from the N1.61 billion pre-tax profit reported in 2022. The company’s net income also recorded an 87.4% growth, increasing from N1.17 billion in 2022 to N2.20 billion in 2023.
eTranzact recorded a 50.4% revenue growth, with its income reaching N33.9 billion in 2023, up from N22.5 billion in 2022. eTranzact also posted a return of 73% in the NGX in 2023, with its share price closing the year at N6.05.
One factor traceable to the impressive returns of the companies was their extremely low foreign exchange exposures.