Q3 2023: VFD Group Declares N29.03bn Gross Earning 

Kayode Tokede

The newly listed company on the Nigerian Exchange Limited (NGX), VFD Group has reported N29.03 billion in gross earnings in the third quarter (Q3) ended September 30, 2023, an increase of 23.1per cent from N23.59 billion reported in Q3 2022.

The group declared N22.3billion investment income in Q3 2023, a growth of 19 per cent from N18.73billion in Q3 2022, while investment expenses stood at N18.74billion in Q3 2023 from N12.8billion in Q3 2022.

In the period under review, total of N13.85billion fixed debt takings in Q3 2023 from N11.35billion in Q3 2022 and N3.43billion cost of sales in Q3 2023 drive the group’s investment expenses.

The interplay between investment income and investment expenses dragged the Group’s net investment income to N3.46billion in Q3 2023, a decline of 41.7 per cent from N5.94billion reported in Q3 2022.

With about N7.7billion operating expenses in Q3 2023 from N5.51billion in Q3 2022, VFD Group reported N933.56million profit before tax in Q3 2023, a decline of 82 per cent from N5.06billion reported in Q3 2022.

The financial position of VFD Group improved in the period as total assets hits N200.86billion as of September 30, 2023, a growth of 34.7 per cent from N149.11billion reported in 2022 FY.

The GMD/ CEO, VFD Group, Mr. Nonso Okpala in a statement attributed the increase in gross earning to dividend income and treasury-related income.

On profit, he said, “Our profitability for the period was impacted by the following: Naira depreciation from N447 to N767 (71.85per cent), which increased the cost of the hedge instruments we used to address exchange volatility on our forward transactions and had a significant impact on interest expense.

“Unprecedented inflation and the rising cost of doing business in the country impacted our operating costs as well. During the review period, we also made new investments, the benefits of which could not be recognized immediately, but which would manifest with significant upsides in the coming quarters, which is the crux of our unique business model.”

Okpala expressed further that “due to the time lag between investments and recognition of investment income, our performance did not fully reflect the inherent strength of the balance sheet and the potential of the entire ecosystem.

“Despite a challenging economic environment marked by high interest rates, rising inflation, and Naira depreciation, VFD Group is dedicated to adapting and excelling. In order to add value to all of our shareholders, our team will continue to excel at what we do,” he added.

The management of VFD Group during the listing said it is projected N300.61billion in total assets by 2025 and N5.83billion dividend payout to shareholders in the same period.

The proprietary investment company that focuses on building positive and socially conscious ecosystems by aggregating potentially viable businesses to create innovative products and solutions accessible to the everyday Nigerian citizen and entrepreneur, also projected N53.54billion and N16.44billion profit before tax and gross earnings, respectively by 2025.

The company also announced plans to raise N12.5 billion via rights issue from the capital market.    

Engaging investing public and capital market communities at the facts behind the listing in Lagos recently, Okpala said the company over the years-maintained dividend payout policy and utilized the remaining generated profit on forward investment. 

He noted that the total assets of VFD Group comprises of total equity and debt.

 According to him, “In 2020, on the count of total asset, we were at N81billion.  We were about N149 billion in 2022. We project that in three years’ time will be at about N300billion in total assets.”

Okpala noted that the management of VFD Group is delighted to be listed on NGX and seeks to raise almost immediately N12.5 billion via rights issue from investing public.