eTranzact Profit Drops Despite Revenue Growth

eTranzact International Plc reported lower earnings for the first half of 2026 despite recording strong revenue growth during the period.

The company’s unaudited financial results showed that eTranzact profit after tax declined by 19 per cent to ₦1.22 billion for the six months ended 30 June 2026, compared with ₦1.51 billion in the same period of 2025. While revenue growth remained strong, rising costs reduced overall earnings. Revenue increased by 23 per cent to ₦16.28 billion, up from ₦13.28 billion a year earlier.

The improvement in income was offset by a sharp increase in the cost of sales, which climbed 39 per cent to ₦9.50 billion from ₦6.84 billion. As a result, gross profit edged up by only 5 per cent to ₦6.78 billion, falling well behind the pace of revenue growth.

Operating performance also weakened as administrative expenses rose 22 per cent to ₦4.81 billion, compared with ₦3.94 billion in the previous year. This pushed operating profit down 23 per cent to ₦1.59 billion from ₦2.07 billion. Although investment income increased by 59 per cent to ₦156.79 million from ₦98.78 million, the gain could not fully ease the pressure on earnings. Consequently, profit before tax dropped 19 per cent to ₦1.75 billion, matching the decline in eTranzact profit after tax.

The company’s financial position expanded during the period. Total assets grew 54 per cent to ₦39.02 billion, supported mainly by cash and cash equivalents, which rose 90 per cent to ₦23.69 billion from ₦12.5 billion.

However, total liabilities increased sharply as trade payables climbed from ₦8.05 billion to ₦20.82 billion. Equity recorded a smaller 6 per cent increase, helped by higher retained earnings. Meanwhile, operating cash flow moved from a positive ₦1.14 billion in the first half of 2025 to a deficit of ₦6.86 billion in the same period of 2026 after payments to suppliers and employees more than doubled to ₦21 billion, up from ₦10.47 billion. eTranzact profit remains under pressure even as the company continues to grow revenue. The company’s shares currently trade at ₦14.50 on the Nigerian Stock Exchange, giving it a market capitalisation of ₦133.40 billion.

Will eTranzact be able to improve profitability if it controls rising costs in the coming months?