E-Tranzact loses N1.9b amid digital boost – Nigeria’s premier financial technology company, E-Tranzact International Plc witnessed a decline in the top-line and suffered a net loss of N1.89 billion in 2020 despite reported growth in electronic transactions due to the COVID-19 pandemic.
Audited report and accounts of E-Tranzact for the year ended December 31, 2020 released at the Nigerian Stock Exchange (NSE) showed turnover dropped from N25.19 billion in 2019 to N22.72 billion in 2020.
Gross profit halved from N2.025 billion in 2019 to N1.15 billion in 2020. The company, however, recorded operating loss of N2.14 billion in 2020 as against modest operating profit of N60.32 billion the previous year.
Loss before tax stood at N1.87 billion in 2020 compared with pre-tax profit of N291.61 million in 2019. After taxes, net loss rose to N1.89 billion in 2020 compared with net profit of N147.04 million in 2019. Loss per share stood at 45 kobo in 2020 as against positive earnings per share of 4.0 kobo in 2019.
E-Tranzact International launched a N7 billion rights issue in 2020 to raise equity funds from existing shareholders.
E-Tranzact offered 4.67 billion ordinary shares of 50 Kobo each at N1.50 per share. The rights were pre-allotted on the basis of 10 new ordinary shares for every nine ordinary shares held as at March 25, 2020.
Shareholders of E-Tranzact had in December 2018 authorised the board of the company to raise additional capital of up to N7 billion through the issuance of any form of equity instruments, whether by way of public offering, private placement, rights issue, offer for subscription or other methods they deem fit, with or without preferential allotments, either locally or internationally, at such dates and on such terms and conditions as shall be determined by the directors.
Shareholders also empowered the directors to consider as an alternative or addition issuance of convertible or non-convertible loans while allowing the company to issue undersubscribed shares to interested investors as well as absorb excess subscriptions. Shareholders had also increased the company’s authorised share capital from N2.1 billion or 4.2 billion ordinary shares of 50 kobo each to N9.1 billion or 18.2 billion ordinary shares of 50 kobo each.
Market analysts expected E-Tranzact to use its new issue to correct its free float deficiency, which was 1.78 per cent below the benchmark set for its listing category at the Nigerian Stock Exchange (NSE). E-Tranzact had a free float of 18.22 per cent, 1.78 per cent below the 20 per cent benchmark. E-Tranzact had been given a deadline of December 07, 2020 to redress the deficiency by either reducing the concentrated core shareholdings or dilute them.
Free float, otherwise known as public float, refers to the number of shares of a quoted company held by ordinary shareholders other than those directly or indirectly held by its parent, subsidiary or associate companies or any subsidiaries or associates of its parent company; its directors who are holding office as directors of the entity and their close family members and any single individual or institutional shareholder holding a statutorily significant stake, which is 5.0 per cent and above in Nigeria.