Chams Profit Growth Signals Recovery

Kayode Tokede

With the current on going transformations, Chams Holding Company Plc migrated from 2022 financial year and the third quarter ended September 30, 2022 losses to becoming a profitable company in the third quarter of 2023.

Despite reporting N375.24million loss in 2022 financial year and N135.81million loss in Q3 2022, the group recovered and generated N255.1 million profit in Q3 2023.

The profit growth was driven by a significant increase in revenue and the board management of finance income.

In Q3 2023, Chams Holdings declared N7.51billion revenue, representing an increase of 137 per cent from N3.17billion reported in Q3 2022.

Key contributing factors to Chams Holdings’s revenue in Q3 2023 includes: N3.45billion generated from Printer Solutions and Access, N1.99billion generated from card personalisation & printing and N1.08billion from Payment Systems Solutions.

‘Drivers of revenue in Q3 2023’

The company’s recent financial performance has left industry insiders and investors alike pondering the driving forces behind Chams’ impressive ascent.

The company’s subsidiary, Card Center Nigeria Limited (CCNL), has been a key player in this success story. Widely recognized for its production of financial cards, CCNL has strategically diversified into the local production of SIM cards for Telecoms and Internet Service Providers (ISPs) operating in Nigeria.

This move aligns with Chams’ commitment to innovation and signifies a bold step towards reducing industry reliance on foreign exchange and ensuring cost-effectiveness in the production of SIM cards.

CCNL, a pioneer in the production of financial cards, has significantly expanded its capacity, now boasting the capability to produce an impressive 60,000 cards per day.

Plans are already underway to further increase this production capacity, with a move to a new warehouse scheduled for 2024. The company’s foresight and adaptability are evident in its recent test run of the production of the Afrigo card scheme, a project facilitated by the Nigerian Interbank Settlement System (NIBSS).

This landmark achievement positions CCNL as an industry trailblazer, having successfully onboarded not only traditional banks but also beginning to onboard fintech players, including MoniePoint, Opay, and PalmPay.

The local production of SIM cards is a strategic masterstroke by CCNL and Chams Holdco, fostering national self-sufficiency and insulating the industry from the volatile foreign exchange market. CCNL has produced an impressive 11.5 million SIM cards this year, a testament to the company’s commitment to quality and efficiency.

Chams Holdco’s impressive financial performance is a result of meticulous backward integration efforts. Collaborating with strategic partners, CCNL is set to introduce new production lines for SIM cards and is looking to become a net exporter of its products to other African countries.

The company’s strategic moves, including the expansion of its card production capabilities, the successful onboarding of major players, and the ground breaking venture into local SIM card production, stand out as key contributors to its financial surge.

Chams Holdco’s ability to adapt to market dynamics and pioneer innovative solutions is undoubtedly shaping its trajectory as a frontrunner in Nigeria’s rapidly evolving tech landscape.

Meanwhile, cost of sales increased to N5.67billion in Q3 2023 from N2.52billion in Q3 2022 to positioned its gross profit to N1.84billion in Q3 2023, representing an increase of 181per cent from N652.4million reported in Q3 2022.

In the period under review, the group declared N175.16miillion finance cost from N138.06million in corresponding period as finance income increased from N53.27million in Q3 2022 to N106million in Q3 2023.

The group operates through its four subsidiaries: Chamsswitch  Limited, Chamsaccess  Limited, Chamsmobile  Limited  and Cardcentre Limited.

Chamsswitch Limited is an indigenous and a leading Financial Technology solutions company with deep specialization in payment and transaction switch services.

The subsidiary provide electronic transaction switching services  between financial and nonfinancial institutions; offers consumer-based telecommunication services such as Utility Bills Payments, E-Government  services Virtual TopUp and USSD  etc  to institutions and individuals; routes transactions between different parties via payment cards which is aided by virtual and physical payment terminal system and works with local & international brands towards promoting electronic payment services within Nigeria and across Africa.

Through series of restructuring, the company through its Chamsaccess has advanced to become a major leader in financial and identity technology solutions, committed to providing simplified technology solutions to enhance people’s lives.

With roots in Nigeria, Chamsaccess  has set sights on spreading beyond the shores while maintaining position as Africa’s first choice in Technology Services.

Chamsmobile is a CBN licesnsed Mobile Money Operator to open and maintain wallets for fund  deposits, transfers and savings with its Kegow app

For CardCentre Nigeria Limited, its major milestones are: Pioneered cards to Banks on the ValuCard scheme between 1992 and 2003, printing of 70 million Nigeria Independent National Electoral Commission (INEC) voters identity cards in 2007. The company was at the forefront in transforming the Nigerian payment landscape into a digital society and it plays actively in the private and public sectors, with a major footprints in the banking sector.

 Solid balance sheet

The group balance sheet remained solid as total assets increased to N18.27billion as of September 30, 2023 from N16.29billion reported in 2022 financial year.

The breakdown of total assets revealed that current assets of the group grew to N8.12billion as of September 30, 2023 from N6.29billiion in 2022, while non-current assets moved from N9.99billiion in 2022 to N10.15billion as of September 30, 2023.

2023 YTD Key Achievements

Amid recovery from prior losses, investors on the Nigerian Exchange Limited (NGX) have reacted positively and the stock price of Chams has appreciated by 718 per cent to N1.80 per share as of December 22, 2023 from N0.22 per share it opened for trading this year.

In 2023, the company possess the highest Fintech License category, which has changed the business model to Platform business.

 The non-operating HoldCo structure is poised for cost-efficient growth as the back office gets consolidated centrally to optimize costs across the group.

It developed a PenCentral solution to resolve reconciliation problems in PFA industry. Over N10billion has been remitted seamlessly through PenCentral this year.

The group’s on-going Business Initiatives

Part of the group on-going Business Initiatives includes, Chamsswitch certification by the biggest card scheme in the world, UnionPay International, is to drive payment across borders , the fastest growing Pension remittance platform with over 700 companies onboarded and remitted over N13billion and business expansion of Perso bureau to include SIM card production. A major supplier of SIM to MTN and others.