Ngozi Amuche
Nigerian electronic payments provider, e-Tranzact, lost 100percent of the N96.09m profit it realised in Q2 2019 and incurred an additional loss of N22.16m.
According to the firm’s unaudited financial report obtained by 1stnewsonline.com from the portal of the Nigerian Stock Exchange, Fintech company recorded a total loss (before tax) of N118.25m in Q2 2020, just about a year after it returned to profitability.
The company had recently recovered from a fraud scandal in 2018. The same year, it posted a loss of N268m. By Q2 2019, eTranzact had successfully overturned the deficit impact and it reported a profit of N96.09m.
But the company saw a significant drop in revenue in Q2 2020. Its revenues declined by more than 10percent – from N6.45bn in Q2 2019 to N5.77bn in Q2 2020.
Despite a 7percent reduction in the cost of sales from N5.9bn to N5.5bn, eTranzact could not capitalise on the margin, owing to a loss of N0.68bn in revenue.
Analysis of the figures showed that eTranzact had an inflow of N11.6bn in Q2 2020 and outflow of N11.39bn. This brought about a net cash flow of N227m.
Net cash of N196m was generated by investments and no loan was obtained by the company.
eTranzact recorded an increase of 0.9percent in cash equivalents from N3.28bn in Q2 2019 to N3.31bn in Q2 2020.
The N227m cash generated from operations by eTranzact in Q2 2020 is about N13m more than the N213m it generated in Q2 2019, but was offset by purchasing costs.
While the interests of over N100m received by the company in Q2 2020 was about the same as Q1 2019, the amount spent on purchasing property and equipment in Q2 2020 totalled N289m. This is 10 times more than what was spent in the previous year.
In proceeds from the sales of plant, property and equipment, eTranzact realised N0.6m, which represents a 0.2percent of the amount it spent on purchases.
In Summary, this is the second time in a row the company’s revenue has declined, after losing N0.3bn in Q1 2020.