Capricorn Group Limited has recorded N$698.2 million in after-tax profit for the six months ended 31 December 2022, a 20.3% increase compared to N$580.5 million recorded prior year.
Annualised return on equity also increased to 16.6% from 14.9% recorded in December 2021.
“The Group’s strong performance is due to a better operating environment with dedicated and committed staff, with Bank Windhoek and Bank Gaborone reporting marked improvement in their results compared to the previous COVID-19 affected period,” said Capricon Group CEO Thinus Prinsloo.
He added that the group expects further economic recovery and improved economic conditions within the Group’s operating regions in the medium to long term.
“COVID-19 has “edged” closer to endemic status, while the severity of the initial economic fall-out from global geo-political tensions spawned by the war in Ukraine has reduced. The significant pressures from increased energy and food costs, high inflation and high-interest rates will continue to have a negative impact for the foreseeable future,” said Prinsloo.
During the period under review, the Group generated N$2.15 billion in value, which was shared by its main stakeholders: Employees contributed N$644.0 million, the government contributed N$411.1 million, and ordinary shareholders contributed N$206 million.
Suppliers received N$311.8 million, Capricorn Foundation received N$8.6 million, and value retained for future expansion received N$564.8 million.
In terms of financial performance, net interest income increased by 14.9% year on year to N$1.3 billion, aided by repo rate increases of 300 basis points and 151 basis points in Namibia and Botswana, respectively.
Bank Windhoek effectively managed its funding costs, resulting in a 54-basis-point increase in net interest margin to 4.88%.
However, due to a sharp increase in the cost of funding in a low-liquidity market, Bank Gaborone’s net interest margin fell from 3.5% to 3.1%.
Similarly, non-interest income increased by N$103.1 million (12.3%), mainly attributable to a 23.3% increase in transaction-based fees, driven by increased transaction volumes specifically using digital channels, particularly EasyWallet, digital fund transfers, ATM withdrawals and point-of-sale transactions.
Additionally, Asset management fees from Capricorn Asset Management increased by 11.3% year-on-year, in line with expectations.
According to the financial results the group’s operating expenses increased by 16.1% (N$165.3 million) year-on-year from a low base environment attributable to COVID-related economic restrictions in the comparative period.
Furthermore, Income from associates increased by 34.6% year-on-year, following a significant reduction in volume and value of life insurance claims received by Sanlam Life relative to the comparative period, which was impacted by the COVID-19 3rd wave in Namibia during the months of July and August 2021.
Meanwhile, Capricorn Group also retained a healthy liquidity position as at 31 December 2022 as the Group’s liquid assets increased by 8.7% (N$1.1 billion) year-on-year.
“Liquid assets exceeded minimum regulatory requirements in Namibia and Botswana by 139% and 119%, respectively, as at 31 December 2022.”
Gross loans and advances increased by N$1.4 billion year-on-year, mainly driven by mortgage loan growth of N$460.8 million (2.4%), commercial loan growth of N$453.6 million (4.2%) and article finance growth of N$388.0 million (10.8%).
The Group declared a 39-cent interim dividend per ordinary share.
“The interim dividend per share for the period under review is 21.9% higher than the comparative period’s interim dividend per share of 32 cents. As is customary, the Group seeks to declare an interim dividend that strikes a balance between prudence in preserving the Group’s capital and liquid asset position and a reasonable dividend yield for investors.”
Capricorn Group is a Namibian listed company that acts as an investment holding company and provides consulting and support services to the other group companies.
Its main investments comprise 100% shareholdings in Bank Windhoek Ltd (BW), Namib Bou (Pty) Ltd, Capricorn Capital (Pty) Ltd, Capricorn Investment Group (Pty) Ltd and Capricorn Hofmeyer Property (Pty) Ltd. The company has a 84.8% shareholding in Capricorn Investment Holdings (Botswana) Ltd, which in turn holds 100% of the share capital in Bank Gaborone Ltd (BG) and Peo Finance (Pty) Ltd, 95.7% in Capricorn Asset Management (Pty) Ltd and Capricorn Unit Trust Management Company Ltd, a 55.5% shareholding in Entrepo Holdings (Pty) Ltd (Entrepo) which owns 100% of Entrepo Life Ltd and Entrepo Finance (Pty) Ltd, a 29.5% shareholding in Sanlam Namibia Holdings (Pty) Ltd, a 28% shareholding in Santam Namibia Ltd, and a 30.0% shareholding in Paratus Group Holdings Ltd.
