Nigerian Fintech Company, eTranzact Records N118.25m Loss in Q2 2020

Nigerian electronic payments provider, eTranzact lost 100% of the N96.09 million profit it realised in Q2 2019 and incurred an additional loss of N22.16 million. This is according to its unaudited financial report posted on the portal of the Nigerian Stock Exchange.

According to the report, the Fintech company recorded a total loss (before tax) of N118.25 million in Q2 2020. This is 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 N268 million. By Q2 2019, eTranzact had successfully overturned the deficit impact and it recorded a profit of N96.09 million.

11% Fall in Revenue

eTranzact saw a significant drop in revenue in Q2 2020. The company’s revenues declined by more than 10% – from N6.45 billion in Q2 2019 to N5.77 billion in Q2 2020.

Despite a 7% reduction in the cost of sales from N5.9 billion to N5.5 billion, eTranzact could not capitalise on the margin owing to a loss of N0.68 billion in revenue.

A breakdown of the numbers…

The report shows that eTranzact had an inflow of N11.6 billion in Q2 2020. and outflow of N11.39 billion. This brought about a net cashflow of N227 million.

Net cash of N196 million was generated by investments and no loan was obtained by the company. eTranzact recorded an increase of 0.9% in cash equivalents from N3.28 billion in Q2 2019 to N3.31 billion in Q2 2020.

The N227 million cash generated from operations by eTranzact in Q2 2020 is about N13 million more than the N213 million it generated in Q2 2019 but was offset by purchasing costs.

While the interests of over N100 million 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 N289 million. This is 10 times more than was spent in the previous year.

In proceeds from the sales of plant, property and equipment, eTranzact realised N0.6 million, which represents a 0.2% 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 N0.3 billion in Q1 2020.

Suggested read: eTranzact Suffers N182.5m Loss in Q1 2020, Far Cry from N90.7m Profit Recorded in Q1 2019

The financial year 2020 so far has seen eTranzact record wipe out the entirety of its 2019 profits due to a significant reduction in revenues coupled with a higher operating cost although its market capitalisation has increased by over 10% from N9.9 billion in 2019 to N10.96 billion this year.