Presco Plc, Guaranty Trust Holding Company (GTCO), United Capital, and Okomu Oil have solid net profit margin that demonstrates their ability to convert per-naira sales into profits in the first quarter.
Data gathered by MoneyCentral shows Presco Oil has a net profit margin (NPM) of 50.73 percent; GTCO, 49.31 percent; United Capital, 45 percent, and Okomu, 37.41 percent.
Others are: Geregu Power, 32.85 percent; Stanbic IBTC Holdings, 32.59 percent; Transcorp Power, 30.95 percent; Transcorp Power, 30.95 percent; Airtel Africa, 29.09 percent; BUA Cement, 27.89 percent; Fidelity Bank, 28.88 percent; BUA Foods, 28.34 percent, 25.56 percent Transnational Corporation, 25.56 percent, and United Bank for Africa 24.84 percent.
Among the most capitalised and liquid firms, only MTN Nigeria recorded a negative net profit margin of -11.05 percent.
Net profit is the amount a company retains after deducting all costs, interest, depreciation, taxes and other expenses. In fact, net profit margin can turn out to be a potent point of reference to gauge the strength of a company’s operations and its cost-control measures.
Also, higher net profit is essential for rewarding stakeholders. Further, strength in the metric not only attracts investors but also draws well-skilled employees who eventually enhance business value.
The NGX 30 Index companies recorded a total of N2.86 trillion in profit after tax (PAT), which represents a 49.73 percent higher than 2024’s N1.91 trillion, according to data gathered by MoneyCentral.
The performance of companies on the Index were impressive as the stability in the foreign exchange market as well as hike in the price of the product helped some of them return to the path of profitability even amid elevate yields in the fixed income market.
However, rising borrowing costs amid inflationary pressures combined with spiraling input costs are downside risks to future earnings.
Some analysts are of the view that if inflationary pressures persists, firms could be in hot waters as they may not be able to pass on higher costs in the form of price increases on beleaguered consumers who are reeling from higher utility bills.
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