SOGEGH reports dip in earnings

On the Ghana stock exchange

SOGEGH reported a profit after tax of 21.89 million for the first quarter of 2018, approximately half of the profit of GHS 44.83 million posted in the same period last year.

The decline in earnings for the period was as a result of a significant reduction in non-interest income by 51% and a rise in operating expenses by 10.16%. SOGEGH’s net interest income also dipped marginally by 2%. The company’s return on equity fell from 12.93% in Q1-2017 to 4.35% in Q1-2018. Its earnings per share declined to GHS 0.20 in Q1-2018 from GHS 0.42 in Q1-2017.

SOGEGH continues to show its commitment to maintaining the quality of its loan portfolio. The company’s non-performing loan ratio in Q1-2018 declined to 13.2% from 15.2% in Q1-2017 whiles the size of its loan portfolio increased by 41%. Impairment loss on financial assets fell to 2.14 million in Q1-2018 from 5.85 million in Q1-2017. Deposits from customers also increased from GHS 1.74 billion in Q1-2017 to GHS 2.03 billion in Q1-2018. SOGEGH’s cost efficiency declined with its cost to income ratio rising to 63.2% from 42.9% in Q1-2017. Its capital adequacy ratio, which is an indicator of the company’s solvency also declined by 4% to 15.8%.

In terms of its share price performance, SOGEGH has rewarded investors with a YTD return of 173.17%. Despite the decline in reported earnings for Q1-2018, GN analysts remain optimistic that SOGEGH will better its financial performance in the coming months anchored on its strong historical performance and continuous commitment to minimizing credit risk in a period where the industry is characterized by high levels of non-performing loans. It is anticipated that SOGEGH will maintain its positive YTD return in the coming months.

The Composite Index and the Financial stock index slipped for the third time this week losing 15.02 points and 15.4 points to peg at a YTD return of 31.50% and 34.84% respectively. There were 2 gainers (PBC & GCB) and 4 losers (SCB, GOIL, EGL & CAL). ETI topped the charts in terms of volume as 104,100 shares worth GHS 23,943 changed hands.

On the Ghana Alternative Market

Trading activity on the Ghana Alternative Market was hushed as no shares changed hands.

On the Currency market

The Cedi appreciated marginally against the British Pound and the Euro but lost to the Dollar at the end of yesterday’s trade. The local currency exchanged at a mid-rate of GHS 4.4142 to the USD, GHS 5.9519 to the GBP and GHS5.2034 to the EURO. The GCFM Cedi index, a measure of the holistic performance of the Cedi on the interbank market now records a year-to-date appreciation of 0.60%.

 

Story: GN Research

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