The Nairobi Securities Exchange has reported a 109% increase in net profit for the year that ended in December 2020. Its profit after tax increased to KSh167.9 million at the end of last year, from KSh80.2 million in 2019, despite a 5% drop in revenue.
In the last year, the company embarked on a cost optimization exercise that led to a KSh 83 million reduction in staff-related expenses, a KSh14 million decline in product development expenses and an overall 25% drop in administrative expenses. NSE’s operating expenses fell to KSh467 million in 2020 from KSh625 million in 2019.
The firm’s revenue, which consists of transaction levy, initial listing fees, additional listing fees, market access fees, broker subscription fees, and data vending income, suffered due to a 3% drop in equity turnover. Income from trading shares, NSE’s largest revenue stream, fell to KSh356.8 million in 2020, from KSh369.2 million in 2019. As a result, total revenue declined to KSh548 million at the end of 2020, from KSh577 million at the end of 2019.
Due to the effects of the covid19 pandemic around the globe, foreign investors exited the NSE leading to a net foreign outflow of KSh28.63 billion in 2020, compared to KSh1.38 billion foreign inflows in 2019.
NSE’s total assets increased marginally to KSh2.31 billion at the end of last year, from KSh2.24 billion in December 2019. Its long term liabilities rose to KSh38.5 million from KSh37 million a year ago.
According to the exchange, improved performance in the past year resulted in KSh161.3 million cash from operating activities, up from KSh53.8 million cash from operating activities in 2019.
NSE has a positive outlook on 2021 performance. “Our expectation for economic and market performance in 2021 is stable driven by prospects of a gradual economic recovery, effectiveness of the Government’s post-Covid recovery strategic programs as well as efforts to contain the COVID-19 pandemic both in Kenya and across global markets,” NSE said in its financial report.
NSE recommends a dividend of KSh0.53 per share for the year 2020, an improvement from the KSh0.08 dividend per share in 2019.