COVID19: African Prudential’s profit dips by 10%

THE impact of coronavirus has been felt by Africa Prudential Plc when it posted an unaudited financial statement for the first quarter of 2020, as the registrar’s profit after tax (PAT) dropped by ten per cent from N0.45 billion in Q1 2019 to N0.34 billion at the end of the quarter in 2020.

Its revenue from contracts with customers closed at N0.13 billion, compared to the N0.27 billion it recorded in Q1 2019, a 52 per cent drop. With a Gross Earnings of N0.74 billion and Profit before Tax of N0.41billion, Africa Prudential delivered an Earnings Per Share of 17 Kobo.

Managing Director, Africa Prudential, Obong Idiong, while reacting to the financial result  explained that the period under review tested the company’s commitment to delivering value to the stakeholders while ensuring that it communicate truthfully, calmly and with resolve.

He said, “As an organisation, we prioritise the welfare and safety of our employees and have responded proactively by implementing our Business Continuity Plan (BCP) which involves the work-from-home protocol for all our departments and business segments whilst attending to all shareholders’ request through our electronic channels.

“We have commenced the full end-to-end automation of Annual General Meetings (AGMs) while providing technology-driven solutions for the corporate action activities of our clients.

“We will continue to offer services through our various cloud-based digital platforms, sustain ongoing technological projects and adequately position for post-crisis continuity of our business operations.”

According to him “Our focus at Africa Prudential is still driven by our digital transformation strategies, achieving world-class superior value for all our stakeholders as we continue to pursue our diversification strategies.”

During the period under review, revenue from contracts with customers reduced by 52 per cent year-on-year on the back of the drop in retainership fee coupled with a significant reduction in fee from corporate actions as a result of the postponement of clients’ AGMs and dividend payment in response to the spread of the novel coronavirus in Nigeria.

The company was, however, able to increase its revenue from digital consultancy by more than 900 per cent, thereby emphasising the positive result from the company’s diversification strategy into digital technology.

On the other hand, the company recorded a three percent year-on-year increase in interest income driven by a 23 per cent surge in the interest realised from loans and advances, thereby overriding the drop from other interest income sources.

Also, this reduced by nine per cent year-on-year, due to the 25 per cent decline in profit before finance costs and tax as well as an increase in the company’s operating expenses amidst the mounting pressure on gross earnings brought about by the coronavirus-induced disruption to the company’s operations.

For Mr Idiong, the earnings were too impressive because of the COVID-19, which has forced many businesses to either shut down or operate remotely.

“Globally, this year had kicked off on an unprecedented note, with the unanticipated spread of the coronavirus disrupting economic activities all across the globe, Nigeria inclusive.

“The COVID-19 pandemic had threatened the smooth operations of our business and that of our clients’ mounting enormous pressure on our revenue sources particularly the revenue from contract with customers, the resultant effect was the reduction recorded in our gross earnings for Q1 2020.

“However, the over 900 per cent surge in our digital consultancy revenue attests to the fact that we have a lot of opportunities to harness the potential inherent in our digital technology business to boost our revenue whilst upscaling our diversification strategy.

“The period under review tested our commitment to delivering value to our stakeholders while ensuring that we communicate truthfully, calmly and with resolve.

As an organisation, we prioritise the welfare and safety of our employees and have responded proactively by implementing our Business Continuity Plan (BCP) which involves the work-from-home protocol for all our departments and business segments whilst attending to all shareholders’ request through our electronic channels.

“Further, we have commenced the full end-to-end automation of AGMs while providing technology-driven solutions for the corporate action activities of our clients.

“We will continue to offer services through our various cloud based digital platforms, sustain ongoing technological projects and adequately position for post-crisis continuity of our business operations,” the MD said.

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