Top 10 most profitable Nigerian companies in 2022

Despite the economy’s current difficulties, Nigerian businesses continue to report great financial performance thanks to rising demand. Businesses in the biggest economy in Africa have held up well in the face of high inflation and slow economic development.

In comparison to the 3.4% growth recorded in 2021, the Nigerian economy grew by just 3.1% in actual terms that year. A 21-year high of 18.77% was reached for headline inflation in 2022 as a result of the Russia-Ukraine war’s spillover effects.

However, firms in the country have been able to boost their profits while providing dividends to their shareholders. The fifty (50) leading firms listed on the Nigerian Exchange (NGX) in 2022 reported a profit before tax of N3.54 trillion, an increase of 8.1% from the N3.27 trillion in the year before.

As a result of the enterprises’ payment of N1.39 trillion in total dividends to shareholders during the year, post-tax earnings also climbed by 9.8% to N2.69 trillion. It is important to note that despite the fact that inflation and FX difficulties affected the companies’ costs, they were nevertheless able to generate excellent results and compete for the most profitable firms.

Based on their profit before tax (PBT), RNN Research has created a list of the top 10 most profitable companies in Nigeria in 2022. PBT is a crucial indicator for assessing a company’s performance, particularly from the viewpoint of the shareholders, as dividend payments are made from net income, which is what remains after taxes are subtracted from PBT.

A cursory review of the ranking showed that 20% of the companies were telcos, 20% were cement-producing firms,10% were consumer goods, and the remaining 50% were made of banks.

The listed banks posted N1.03 trillion as PBT, the telcos recorded N995.2 billion, the consumer goods company posted N107.2 billion, while the two cement companies recorded N644.2 billion as PBT.

Below is the list of the 10 most profitable companies in Nigeria in 2022.

5. GTCO – N214.2 billion (-3.3%)

Guaranty Trust Holdings (GTH) is a Nigerian financial services company that ranked fifth on the list of most profitable companies in the country in 2022. With a profit before tax of N214.2 billion, GTH’s financial performance is a testament to its sound management and its commitment to providing innovative and customer-centric banking services.

Despite facing challenges such as rising operating costs and an N35.6 billion expected credit loss to its exposure to securities issued by the Ghanaian government, GTH’s revenue grew by 20.4% to N539.4 billion in 2022. Profit after tax also declined slightly by 3.2% to N169.2 billion from N174.8 billion in 2021.

In recognition of its strong financial performance and commitment to innovation, GTH was awarded as Independent Best Commercial Bank in Digital Technology and Support for SMEs in 2022. The company declared a total dividend of N88.29 billion to its shareholders in the review year.

GTH is well-positioned to continue to grow and prosper in the years to come. It is a leading financial services company with a strong track record of innovation and customer service. GTH is committed to providing its customers with the best possible banking experience, and it is well-positioned to capitalize on the growth opportunities in the Nigerian market.

4. Zenith Bank Plc – N284.7 billion (+1.5%)

Zenith Bank Plc posted a pretax profit of N284.7 billion in 2022, a slight increase of 1.5% compared to N280.4 billion recorded in the previous year. The bank’s gross earnings increased by 23.5% year-on-year (YoY).

The bank’s net income dipped by 8.4% to N223.9 billion in 2022, due to an increase in tax expenses of 69.6%. The bank also incurred an impairment loss of N59 billion on Ghana’s government debt instruments.

Despite these challenges, Zenith Bank declared a total dividend payment of N100.5 billion in 2022, up from the N97.3 billion paid in the previous year.

Here are some of Zenith Bank’s financial performance in 2022:

• The bank’s gross earnings grew by 23.5% YoY, driven by an increase in interest rates and demand for credit.
• The bank’s pretax profit increased by 1.5% YoY, but its net income declined by 8.4% YoY due to higher tax expenses and an impairment loss on Ghana’s government debt instruments.
• The bank declared a total dividend payment of N100.5 billion in 2022, up from the N97.3 billion paid in the previous year.

3. Airtel Africa Plc – N334.6 billion (-10.2%)

Airtel Africa Plc, which earns about 40% of its revenue from Nigeria, recorded a profit before tax of N461.3 billion in 2022 compared to N513.5 billion in the previous year. It is worth noting that the company reports its financials in USD, which has been converted using the prevailing N/USD exchange rate.

Revenue surged by 18.5% to N2.34 trillion, while operating profit also increased by 21.7% to N783.8 billion. However, net profit increased by 5.6% to N334.6 billion in the review year compared to 2021.

Meanwhile, the company attributed the decline in profitability to the impact of currency devaluations across its markets. The firm declared $0.05 as total dividends in the review year, translating to a dividend payment of N91.4 billion.

2 Dangote Cement Plc – N524 billion (-2.7%)

The largest cement manufacturer in Africa, Dangote Cement, reported a PBT of N524 billion in 2022, a slight decrease of 2.7% from N538.4 billion in 2021. Despite a drop in sales volume, the company, which derived the majority of its income from the sale of cement and clinker, witnessed a 17% increase in revenue to N1.62 trillion from N1.38 trillion a year before.

Due to a decrease in income tax expenses, which fell by 18.5% to N141.7 billion, operating profit climbed marginally by 0.6% to N585.9 billion, while net income increased by 4.9% to N382.3 billion.

A total dividend of N20 per share was declared by Dangote Cement, which would be paid out in 2022 in the sum of N340.8 billion.

1. MTN Nigeria – N553.97 billion (+22.3%)

MTN Nigeria, the leading telecommunications company in Nigeria, reported a profit before tax (PBT) of N533.97 billion in 2022, representing a 22% increase from N436.7 billion in 2021. The company’s revenue surged by 22% to N2.01 trillion, representing the first Nigerian company to post revenue above N2 trillion. Its operating profit increased by 25% to N733.29 billion, while profit after tax (PAT) was stated at N175.1 billion. MTN incurred N175.1 billion as income taxes for the year.

MTN Nigeria rewarded its shareholders with a total dividend of N15.6 per share for the year, up from N13.12 per share in 2021. The company’s total dividend summed up to N317.53 billion from N267.1 billion in the previous year.

Here are some of MTN Nigeria’s financial performance in 2022:

• The company’s revenue growth was driven by increased demand for data and digital services, as well as cost optimization and operational efficiency.
• The company’s PBT and PAT increased by 22% and 25%, respectively, due to the factors mentioned above.
• The company’s dividend per share increased by 18%, and the total dividend paid to shareholders increased by 22%.
• Overall, MTN Nigeria’s financial performance in 2022 was strong. The company’s revenue growth, profitability, and dividend payments all exceeded expectations. This is a positive sign for the company and its shareholders, and it suggests that MTN Nigeria is well-positioned for continued growth in the future.

Others

• UBA – N200.9 billion
• Access Holdings – N167.7 billion
• FBN Holdings Plc – N157.9 billion
• BUA Cement – N120.2 billion
• BUA Foods – N107.2 billion

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