NCR Gets Valuation Haircut amidst Large FX Loss

NCR Gets Valuation Haircut amidst Large FX Loss

Technology company, NCR Nigeria Plc (Ticker: NCR) lost 18.7% of its stock market valuation amidst heavy selloffs by investors in the domestic equities market. The company revealed in its financial scorecard a large exposure to exchange rate loss.

The signal bleak outlook for the company’s earnings as there is no signal that the Nigerian naira will either rebound or trade steadily against the onslaught of the United States dollar – which is highly in demand for foreign transactions as the base currency.

Its weekly loss in the stock market actually extends its year-to-date loss to 34.72%, according to market data. In an effort to reduce costs, the management cut down consulting, advisory and legal fees significantly to N1.975 million from N27 million in 2021.

Still, it reported a loss for the year, losing N9.25 on every share deployed for its operations. Trading statistics showed NCR Nigeria Plc offers no value as an investment window – no dividend track record and the stock market performance has been in red – weekly, year to date and annually.

In the equities segment of the Nigerian Exchange, the company’s valuation declined to N253.8 million after massive selloffs from its 108 million shares outstanding.

The company’s share printed at N2.35 on Friday, 18.69% lower from N2.89 at the beginning of the week. Data from the NGX showed that NCR has no dividend payments history and at the moment there is no information about whether it is going to pay them in the future. 

All major indicators point to sell on technical rating for NCR. In 2022, NCR reported revenue came in at N3.269 billion, up 10% from N2.540 billion in the comparable period in the financial year 2021.

Form N301.67 billion in 2021, NCR reported that gross profit declined to N229.5 million as costs of sales growth accelerated above revenue surge in the period.

Overall, the company reported about N1 billion loss in 2022 due to a massive loss of inflow from other income sources versus N7.522 million profit declared in the comparable year in 2021.

Other income declined to about N64 million in 2022, a massive decline, when compared with about N876 billion NCR, reported in 2021.

NCR’s earnings was also peppered by increased operating expenses in the period. While distribution costs declined, its administrative expenses spiked to N1.038 billion from about N790 billion in 2021.

The surge in administrative expenses was driven by N975.28 million exchange rate loss in the year, the company said in its unaudited financial statement.

NCR (Nigeria) Plc provides technology and services that help businesses connect, interact and transact with their customers. The company is a technology company that provides innovative products and services to help its clients build stronger relationships with their customers. #NCR Gets Valuation Haircut amidst Large FX Loss

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