CSCS Grows Revenue, Profit by 31.3% & 41.4%

Central Securities Clearing System Plc (CSCS) has announced its Audited 2020 Financial Results.

Amidst unprecedented economic and financial market conditions occasioned by the COVID-19 pandemic, the Group grew total income by 31.3% year-on-year (YoY) to N12.09 billion.

With profit after tax of N6.93 billion, an incredible 41.4% year-on-year growth, translating to N1.39 earnings per share, the Group delivered 20.3% return on average equity for the 2020 financial year, compared to 15.3% in 2019FY.

Highlights:

Income Statement

-Total Income: N12.09 billion, compared to N9.21 billion in 2019FY (31.3% YoY growth).

– Investment Income:  N7.44 billion, an impressive 61.4% YoY growth, compared to N4.61 billion in 2019FY.

– Operating Expenses: N4.72 billion, compared to N3.23 billion in 2019FY (46.0% YoY growth), partly reflecting investments in technology and human capital.

– Profit Before Tax: N7.39 billion, a 22.3% YoY growth, compared to N6.04 billion in 2019FY.

– Profit After Tax: N6.93 billion, compared to N4.90 billion in 2019FY (41.4% YoY growth).

– Return on Average Equity (ROAE): 20.3%, compared to 15.3% in 2019FY.

– Earnings Per Share (EPS): 139 Kobo, compared to 98 Kobo in 2019FY (41.8% YoY growth).

Balance Sheet

-Total Assets: N41.42 billion, compared to N36.61 billion as at 2019FY (13.1% YoY growth).

– Property, Plant and Equipment (plus intangibles) grew 25.0% YoY to N1.35 billion, reflecting continued investments in infrastructure to enhance operational efficiency and resilience.

– Shareholders’ Funds: N35.49 billion, up 7.9% YoY; reflecting strong capacity for organic capital growth.

Commenting on the Group’s performance, Mr. Oscar N. Onyema OON, the Chairman, Board of Directors of CSCS, said;

“It is exciting to report these stellar results. Defying the unprecedented challenges that characterised 2020 financial year, CSCS emerged stronger, delivering outstanding growth in top and bottom-lines, and executing far-reaching initiatives that would sustainably strengthen the competitiveness and resilience of the business.

“Having grown profit by over 41% in such a challenging year to deliver 20.3% return on average equity, the Board of Directors and Management are upbeat about the value accretive prospects of CSCS, and we are enthusiastic that the progress made thus far in repositioning the business to efficiently play a more active and leading role in deepening the Nigerian capital market will be sustained.

“With continuous investments in new technologies, talent, and work environment, we are optimistic on the productivity of CSCS going forward. Subject to shareholders’ approval at the upcoming annual general meeting, the Board is recommending a dividend of N5.85 billion or dividend per share of N1.17, representing a growth of 36% over the N0.86 dividend per share paid from the 2019 financial year earnings.”

While commenting on the Group’s results, Mr Haruna Jalo-Waziri, the Chief Executive Officer, said;

“Amidst the COVID-19 twin threat to lives and livelihoods, and more importantly the attendant challenges in economic and business environment, we outperformed budget, reinforcing our commitment to delivering superior value to our shareholders, irrespective of the odds.

These impressive results reflect our enhanced collaboration with different stakeholders and their unflinching support and loyalty to CSCS, as the core infrastructure for the Nigerian capital market.

Hence, my colleagues and I are excited to dedicate this performance to our esteemed participants, regulator and the Board of Directors, whose support kept us stronger through the pandemic. We would continue to invest in our collective objective of deepening the capital market and broader financial system, even as we seek new and efficient ways of enhancing our partnerships for mutual prosperity.

Having laid a solid foundation over the past three years, we are more than ever optimistic on the prospect of our business, especially as we diversify the business for enhanced resilience against macro and market volatilities.

We will sustain our disciplined cost efficiency culture, in our commitment to delivering sustainable value to shareholders over the long term. We are excited at the 39.0% cost-to-income ratio, despite the impact of exchange rate volatilities and rising headline inflation on our cost base.

“The years ahead look challenging, albeit more promising than ever, as we reinforce our commitment to leveraging best-in-class technologies and our continuous investments in human capital in delivering value to all stakeholders.”

Also commenting on CSCS’ financial performance, the Chief Financial Officer, Mr. Peter O. Medunoye noted;

“We recorded impressive double-digit growth in revenue and profitability, and more importantly recorded continuous improvement across all key performance indicators. We recorded decent growth in income from our CSD and ancillary services whilst also leveraging our ingenuity in effectively positioning the proprietary investment portfolio for growth.

“Delivering 17.7% and 20.3% return on average assets and return on average equity respectively, we are excited at the capacity of the business in generating internal capital to fund the exciting growth ahead.”