COVID-19: Africa Prudential Q1 revenue declines by 52% to N0.13bn

By afusat Adeoye

Africa Prudential Plc has recorded a decline in its revenue from contracts with customers by 52 per cent to N0.13billion, compared to N0.27billion declared in Q1 2019.

The company recently released first-quarter result of the Africa Prudential plc, the only listed registrar on the stock exchange, for the period ended 31st March, typically mirrors the impact of COVID-19 on revenue streams of most corporates this year.

Figures from the financial result showed that the firm interest income increased by three per cent to N0.61billion compared to N0.60 billion in Q1 2019, even Gross Earnings tanked 14percent to N0.74billion compared to N0.87billion in Q1 2019

But its Profit Before Tax plummeted 9percent to N0.41billion compared to N0.45 billion in Q1 2019; while Profit After Tax dropped 10percent to N0.34 billion, compared to N0.38 billion in Q1 2019.

According to the management, the decline in revenue rode on the back of a drop in retainership fee during the first quarter 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.

Also, the company attributed the drop in profit to a 25percent drop 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.

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

In a bid to curtail the spread of the virus, President Muhammadu Buhari declared a restriction of movement for an initial period of 14 days which was later extended by another two weeks in Abuja, Lagos and Ogun States forcing businesses and companies grind to a halt.

“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,” Obong Idiong, managing director, Africa Prudential said.