NICO | National Investments Company (NICOL) - Valuation Update - March 2023

    The NMB divided growth led to a 22% growth in dividend income for the year 2022. As a result of the diversification away from the bank, dividend from NMB as income to NICOL only grew by 24% compared to 41% growth of the bank’s dividend payout. During the year 2021, NICOL disposed 20% of their NMB holdings at the time and reinvested the proceeds into Treasury bonds. As a result, interest income grew by 121% during the year 2022, leading to an aggregate investment income growth of 46%. Dividend income accounted for 64% of investment income, down from 77% in 2021.

    The operating margin for the year went up 470bps to 76.9% despite a 39% growth of operating expenses. Administration expenses grew the most due to two extra-ordinary general meetings held during the year to appoint the board. Finance costs grew from TZS 11.2mln to TZS 87.7mln due to the processing fee of the loan secured during the year. We expect finance costs to be above TZS 2bln for the year 2023 as the loan service kicks in. The net margin for the year 2022 also went up 450bps to 72.6%. The EPS for th e year was TZS 97/-, while lacking a clear dividend policy, the expected dividend is uncertain.


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