The Enterprise Group recorded a profit of GH¢222.67million in 2022, compared to GH¢122.85million in 2021 – representing an 81.25 percent increase, the company has announced.
The growth in profit comes despite liquidity challenges that confronted the country last year, and was attributed to the fair value gains on its investment properties resulting from currency movement.
However, its profit was impacted adversely by a GH¢329million impairment on government bonds as required by the international accounting standards resulting from the discounted cash flow of the new bonds to be issued under the Domestic Debt Exchange Programme (DDEP) compared to the value of old bonds.
The Group’s net income for the period stood at GH¢1.602billion, which translates to 37.4 percent growth over 2021 following a 21 percent increase in net earned premium in addition to the positive currency impact on investment properties valuation and other revenue growth from pensions, funeral and properties businesses.
During the period, the composite index of the Ghana Stock Exchange’s (GSE) performance suffered a 12.38 percent decline – resulting in a total market capitalisation of GH¢64.5billion. The decline reflected challenges encountered in the larger economy during the year, as investors tried to cash out to cut their losses.
This notwithstanding, Enterprise Group’s stock price recorded an increase of 14.6 percent – from GH¢2.79 at the beginning of the year to GH¢ 3.20 per share by year-end. It was against this development that a dividend of GH¢0.0744 per share was announced, for 2022, to shareholders.
Speaking in an interview on side-lines of the Group’s annual general meeting in Accra, its Chief Executive Officer (CEO), Daniel Larbi-Tieku, maintained that the Group has been consistent in its delivery; leading to the current gains.
Given this, he observed that the business’ future is bright – especially considering the progress made despite challenges brought by the DDEP, while projecting a 20 percent growth for 2023.
He assured shareholders that, “So long as we continue to drive the value, which is key and central to our strategic objective, we will continue to pay a reasonable dividend”.
Meanwhile, he committed to continuing execution of the Enterprise Group’s 5-year strategic plan, which commenced in 2020 and is expected to end by 2024 – promising to improve the returns of shareholders, depending on how much value they can add from its implementation.
The Board Chairman of the Enterprise Group, Keli Gadzekpo, in his report during the AGM also disclosed that management keeps making progress with implementing the strategic plan, which enters its penultimate year in 2023.
“The six pillars of people, consumer, synergies, innovation, new markets and digital transformation remain relevant even in current times. However, with the changing operating environment, we intend to initiate new tactics which will enable us to achieve the key elements of our strategic plan.
“Focus will be to deepen the relationship with customers through the deployment of systems which make engagement more purposeful, seamless and beneficial to them, while expanding customer footprints across the various segments of businesses,” he added.
Also, he is optimistic that the tight liquidity situation in the market occasioned by the DDEP may well ease when the new government bonds start trading on the secondary market.
“While interest rates have started to decline, the future is difficult to predict. Ghana has come through similar crises in the past with renewed growth and stability. We are committed to long-term value creation for the benefit of all our stakeholders, through staying focused on our plans with the support of our major shareholders in Black Star Holdings Limited,” he added.
Mr. Gadzekpo opined that while the DDEP is painful in the short-term for both policyholders and shareholders, the long-term benefits for all stakeholders will be greater financial stability with lower inflation and interest rates.