Top Dogs: Nigeria’s Most Profitable Firms Boast Impressive Return on Equity – September 2023

Achieving the highest profits doesn’t necessarily translate to being the most profitable. Profitability extends beyond mere financial gains and serves as a barometer for how efficiently a company operates. Several metrics, such as Return on Assets (RoA), Return on Equity (RoE), Net Income, and Profit Margin, among others, are employed to gauge profitability.

In this analysis conducted by Infostride News, we delve into the most profitable companies in Nigeria, focusing on Return on Equity as the primary indicator. The Return on Equity will be evaluated based on the financial performances of these companies during the nine months ending September 2023.

While the banking sector has dominated profit charts in Nigeria, a notable trend emerges as the most efficient companies in terms of generating income from shareholders’ equity hail from the agricultural sphere.

**AXA Mansard Insurance – 33.19%**

Within the nine months ending September 2023, AXA Mansard Insurance demonstrated a return on equity of 33.19%, supported by a net income of N12.56 billion. Notably, the group’s net assets saw a robust growth of 23.8% year-to-date, while net income soared by an impressive 738% year-on-year from the corresponding period in 2022. Earnings per share also witnessed a remarkable 700% year-on-year surge, reaching N1.36 compared to N0.17 in the same period last year.

**United Bank for Africa – 33.28%**

Despite ranking second in profit generation with a pre-tax profit of N502.1 billion in 9M 2023, United Bank for Africa (UBA) secures the ninth position in terms of Return on Equity, standing at 33.28%. The group’s net assets grew significantly by 92.8% year-to-date, and its net income within the same period experienced a remarkable 287.2% growth. Earnings per share also surged by 295.4% year-on-year to N12.93, delivering impressive returns for shareholders’ equity.

**GTCO – 33.34%**

GT Holdings Company (GTCO), despite a lower net income in the nine months ending September 2023, outshines UBA in terms of Return on Equity, recording an impressive 33.34%. During this period, GTCO posted a net income growth of 181.9% year-on-year to N367.4 billion, while net assets grew by 36.7%.

**Zenith Bank – 39.27%**

Zenith Bank, the leading profit generator in Nigeria, also claims the title of the most profitable bank based on Return on Equity. With a nine-month net income of N647.7 billion, marking a 412.6% year-on-year growth, and a net assets growth of 39.2% year-to-date, the group records a Return on Equity of 39.3%. Earnings per share grew by 149% year-on-year to N13.82.

**Cornerstone Insurance – 41.72%**

Cornerstone Insurance Plc emerges as Nigeria’s most profitable financial institution in 2023, boasting a remarkable Return on Equity of 41.7%. Despite a net income loss of N388 million in Q3 2023, the company recorded a net income of N11.4 billion throughout the nine months, marking a staggering 2667.7% year-on-year growth from the same period in 2022. This exceptional performance is attributed to a net foreign exchange gain of N11.9 billion.

**BUA Foods – 43.42%**

Ranked as the fifth most profitable company in Nigeria based on Return on Equity, BUA Foods, one of the country’s largest firms, recorded a net income of N105.6 billion during the nine months of 2023. This marked a 53.6% year-on-year growth from the corresponding period in 2022, accompanied by a year-to-date net assets growth of 10.7%.

**MTN Nigeria – 45.64%**

Despite suffering significant losses due to foreign exchange exposures in 2023, MTN Nigeria, the highest profit generator in 2022, showcases an impressive Return on Equity of 45.64% in the first nine months of 2023. The decline in net income by 45.2% year-on-year is countered by a 7.6% year-to-date decline in shareholders’ equity.

**National Salt Company of Nigeria (NASCON) – 47.40%**

A subsidiary of the Dangote Group, National Salt Company of Nigeria (NASCON), secures the third position as the most profitable company in the country, boasting a Return on Equity of 47.40%. Despite a modest nine-month net income of N11 billion in 9M 2023, the company records a significant year-on-year growth of 282%, accompanied by a net assets year-to-date growth of 43.9%.

**Presco – 50.24%**

Presco Plc, Nigeria’s largest oil palm producer, ranks as the second most profitable company in the country with a Return on Equity of 50.24%. Recording a net income of N23.48 billion during the nine months ending September 2023, the group experienced a year-on-year increase of 47.8%, complemented by a year-to-date net assets growth of 19.2%.

**Okomu Oil – 53.96%**

Okomu Oil Palm Company tops the list as Nigeria’s most profitable company based on Return on Equity, boasting a RoE of 53.96%. The group’s 9M 2023 net income reached N20.9 billion, representing a year-on-year growth of 15.9%, accompanied by a year-to-date assets growth of 27.8%.

**What you should know**

This list showcases a diverse range of industries, with three banks, two insurance companies, two consumer goods companies, two agriculture companies, and one telecommunications company. The inclusion of companies from various sectors underscores the manifold ways in which profitability is achieved in the Nigerian business landscape.

Despite variations in net income and equities, Return on Equity (RoE) remains a crucial metric in assessing performance. The efficiency in utilizing shareholders’ equity emerges as a key factor in determining the profitability of a company. This comprehensive analysis by Infostride News sheds light on the dynamic landscape of corporate profitability in Nigeria, emphasizing not just on profits, but the efficient utilization of resources to achieve sustained success.