Revenues however grew to US$6.2 million from Ksh6.0 million a year earlier
Nairobi Securities Exchange (NSE) net profit for the year ended December 2018 fell 11.8 per cent to Ksh190.7 million (US$1.9 million) from Ksh216.3 million (US$2.2 million) the previous year, as the self listed company grappled with higher operating costs.
During the financial year, administrative expenses increased to Ksh560 million up from Ksh495.9 million it reported in 2017, “mainly due to a salary review alignment and revaluation deficit on the valuation of the NSE building,” the management has said, which impacted negatively on the profit.
The company’s revenues however remained on an upward trajectory closing the year at Ksh626.2 million, a 3.1 per cent increase from Ksh607.4 million a year earlier.
Interest income was equally up 17.9 per cent to Ksh116.3 million from Ksh98.6 million “due to prudent management of funds.”
This together with other income (Ksh39.6 million) pushed total income 3.9 per cent up to close at Ksh782.1 million up from Ksh752.7 million.
The growth was supported by a two per cent increase in equity turnover which rose to Ksh351 billion in 2018 from Ksh343 billion in 2017 together with bonds turnover which increased by 29 per cent to Ksh1.12 billion from Ksh872 billion.
Share of profit of associate increased 64 per cent to Ksh19 million, from Ksh12.3 million in 2017 owing to increased profitability.
Total assets increased nominally by five per cent from Ksh 2.1 billion in 2017 to Ksh 2.2 billion in 2018.
During the period under review, the Group recorded a return on assets of 8.6 per cent and a return on equity of 9.1 per cent in 2018.
“Our expectations on the economic activities and the general business environment in Kenya are positive going into 2019,” CEO Geoffrey Odundo said, noting that the government’s investment in the Big Four Agenda will create new opportunities for businesses to grow.
According to the International Monetary Fund (IMF), Kenya’s GDP could grow to 6.01 per cent due to improved performance in various sectors, including real estate, tourism, manufacturing, and agriculture.
“The NSE will in the coming year focus on enhancing uptake of its various products. With the broadening of our product offering, companies can now tap into various forms of capital including debt, equity and Real Estate Investment Trusts to raise funds for their businesses,” NSE said in its financial statement.
The firm has embarked on the full roll-out of the Ibuka program which is an incubation and accelerator platform for providing companies with visibility, capacity building and networking opportunities on a hosted basis.
From a product development perspective, the NSE says it foresees launching of the derivatives market this year.
“The NSE will continue to focus on its innovative strategy and in the coming year deliver its products through more accessible digital channels. During the year, we intend to support the issuance of the M-Akiba retail bond program and in addition promote sustainable financing through issuance of green bonds,” Chairman Samuel Kimani said.
In 2019, the NSE will strengthen its operational efficiency through optimisation of its resources and management of costs, the management has affirmed.
The directors have recommended the payment of a first and final dividend for the year 2018 of Ksh0.49 per ordinary share comprising of an ordinary dividend of Ksh 0.29 per share and a special dividend of Ksh 0.20 per ordinary share (2017 Kshs. 0.30 per share).