NCR (NIGERIA) PLC  Q3 Result – Return to Profitability Anchored by Strong Cost Discipline and Improved Operational Efficiency

Executive Summary

NCR Plc recorded a remarkable turnaround in performance for the nine months ended 30 September 2025, reporting a profit before tax of ₦237.98 million, compared to a loss of ₦2.65 billion in the corresponding period of 2024. This impressive rebound reflects stronger revenue generation, improved cost efficiency, and operational restructuring initiatives that have started yielding tangible results. Revenue from contracts with customers grew by 13.9% year-on-year to ₦1.50 billion, while gross profit increased to ₦321.90 million, representing a 23.6% YoY growth. Notably, the Group achieved this performance despite a moderate reduction in other income, highlighting the improved efficiency of its core operations. On the balance sheet, total assets expanded by 19.7% to ₦5.30 billion, supported by improved receivables management and stronger liquidity, while total liabilities rose modestly to ₦9.87 billion, reflecting higher payables associated with inventory restocking and contract obligations. The company’s positive bottom line marks a critical inflection point in its financial trajectory, underscoring management’s commitment to strategic recovery and sustainable profitability.

Financial Highlights

₦’000 9M 2025 9M 2024 % Δ YoY Q3 2025 Q3 2024 % Δ YoY

Revenue from Contracts 1,498,253 1,315,191 +13.9% 598,573 524,263 +14.2%

Cost of Sales (1,176,358) (1,054,641) +11.6% (438,605) (233,585) +87.8%

Gross Profit 321,895 260,550 +23.6% 159,968 290,679 -44.9%

Other Income 36,716 56,798 -35.4% 7,940 (43,081) N/A

Distribution Expenses (28,888) (59,003) -51.0% (1,153) (30,104) -96.2%

Administrative Expenses (91,747) (2,911,994) -96.8% 26,553 (1,470,938) N/A

Profit/(Loss) Before Tax 237,976 (2,653,649) +108.9% 193,308 (1,253,445) +115.4%

Profit/(Loss) After Tax 237,976 (2,653,649) +108.9% 193,308 (1,253,445) +115.4%

Earnings per Share (₦)** 2.20 (24.57) N/A 1.79 (11.61) N/A

Revenue and Operating Performance

NCR (Nigeria) Plc delivered a 13.9% year-on-year revenue growth, driven by increased demand for its hardware and technology solutions across key corporate clients, particularly in the financial services and retail sectors. The sustained recovery in business activity and digital infrastructure deployment contributed to higher sales volumes. Cost of sales rose by 11.6%, reflecting rising import and logistics costs due to exchange rate pressures. However, the rate of increase in costs remained below revenue growth, resulting in an improved gross margin of 21.5%, compared to 19.8% in the prior period. Other income declined by 35.4% to ₦36.7 million, reflecting lower non-operating gains, but this was offset by a sharp 51% decline in distribution expenses and a 96.8% reduction in administrative costs, reflecting the success of cost optimization initiatives implemented during FY2024.

Profitability Analysis

The company’s profit before tax of ₦237.98 million marks a significant turnaround from the ₦2.65 billion loss recorded in 2024, underscoring the impact of operational realignment and improved cost control.

Key profitability drivers include:

• Strategic pricing and improved margin discipline across key business lines.
• Significant reduction in administrative overheads following cost rationalization.
• Improved working capital management and lower finance costs.

The absence of tax charges during the period implies either accumulated tax losses or deferred tax asset utilization from prior years, providing short-term earnings support.

The Earnings Per Share (EPS) of ₦2.20, compared to a loss per share of ₦24.57, further illustrates the sharp recovery in shareholder value and profitability.

Balance Sheet Overview

₦’000 30 Sept 2025 31 Dec 2024 % Change

Non-Current Assets 97,205 109,041 -10.9%

Current Assets 5,204,599 4,318,492 +20.5%

Total Assets 5,301,805 4,427,533 +19.7%

Total Equity (4,571,166)(4,809,142) +4.9%

Total Liabilities 9,872,970 9,236,677 +6.9%

Interpretation:

• Total Assets increased by 19.7%, driven primarily by growth in trade receivables (+15.8%) and cash & cash equivalents (+88.7%), reflecting improved liquidity and collections efficiency.
• Inventories declined by 34%, indicating better stock management and improved sales turnover.
• Retirement benefit assets remained stable at ₦58.43 million, reflecting steady long-term obligations management.
• Total Equity remains negative at ₦(4.57) billion, but this marks an improvement of 4.9% from the prior year, reflecting gradual balance sheet repair.
• Liabilities increased modestly by 6.9%, driven mainly by higher trade payables (+8.5%) and contract liabilities (+64%), indicating ongoing business activity and order fulfillment obligations.

Key Ratios

Ratio 2025 2024 Change

Gross Margin 21.5% 19.8% +1.7pp

Operating Margin 15.9% (202.0%) N/A

Net Margin 15.9% (201.8%) N/A

Return on Assets (ROA) 4.5% (60.0%) +64.5pp

Current Ratio 0.71x 0.65x +0.06x

Debt-to-Equity Ratio (2.16x) (1.92x) N/A

Interpretation:

• The improved gross and operating margins indicate a return to operational efficiency and cost discipline.
• The positive ROA reflects restored profitability from core operations.
• Although the debt-to-equity ratio remains high due to accumulated losses, the positive earnings trajectory suggests potential balance sheet stabilization in coming periods.

Strategic Insights

• Operational Realignment: NCR’s restructuring initiatives — focused on reducing overheads, optimizing inventory cycles, and streamlining supply chain costs — have significantly strengthened its operational base.
• Revenue Diversification: The company continues to expand its portfolio of digital and ATM servicing contracts, supporting steady recurring revenue streams.
• Working Capital Efficiency: Improved receivables collection and inventory management enhanced liquidity and reduced dependence on short-term liabilities.
• Cost Management: A strategic review of non-core expenses and improved vendor negotiation helped restore profitability margins.

Strengths

• Strong revenue rebound supported by improved client demand.
• Effective cost optimization leading to operating margin recovery.
• Improved liquidity position and cash management.
• Growing contract pipeline from key financial institutions.

Weaknesses

• Persistent negative equity position poses balance sheet risk.
• High trade payables and contract liabilities signal potential short-term pressure.
• Dependence on imported components exposes the firm to FX volatility.

Outlook

The outlook for NCR (Nigeria) Plc in FY2025 is cautiously optimistic. Management’s ongoing efforts to strengthen operational resilience, optimize working capital, and expand its technology solutions portfolio are expected to sustain profitability through year-end. While FX volatility and inflationary pressures remain key risks to cost stability, NCR’s renewed focus on digital solutions, maintenance services, and customer retention positions it for steady growth. Sustaining profitability and restoring positive equity will depend on consistent revenue growth and careful liability management in the coming quarters.

Analyst View

“NCR (Nigeria) Plc’s performance for 9M 2025 signals a decisive turnaround from prolonged losses. The significant improvement in cost control and the return to profitability highlight management’s strategic execution and commitment to restructuring. While balance sheet repair remains a medium-term objective, the improved operational performance and rising demand for its technology infrastructure solutions position NCR for sustained recovery in FY2026.”

Conclusion

NCR (Nigeria) Plc’s return to profitability marks a pivotal shift in its financial direction. The company’s disciplined cost management, improved liquidity, and solid revenue rebound underscore its operational turnaround and commitment to long-term stability. Although challenges remain in restoring shareholder equity and managing liabilities, the fundamentals are improving. With continued focus on efficiency, innovation, and customer-centric service delivery, NCR (Nigeria) Plc is well positioned to sustain its recovery trajectory and rebuild investor confidence in the periods ahead.

NCR (Nigeria) Plc – Signs of Operational Recovery Amid Cost Discipline and Revenue Growth Financial Review for the Period Ended 30 September 2025

Strategic Context

NCR (Nigeria) Plc, a leading provider of technology and automation solutions in Nigeria’s financial and retail sectors, reported a notable turnaround in its unaudited financial results for the period ended 30 September 2025. The company recorded a profit after tax of ₦237.98 million, reversing a significant loss of ₦2.65 billion in the corresponding period of 2024. This marks a key recovery phase, driven by stronger revenue performance, tighter cost management, and a return to operational efficiency following a challenging prior year.

Financial Performance Review

Revenue and Gross Profit

Revenue from contracts with customers rose by 13.9% year-on-year to ₦1.50 billion in 9M 2025, from ₦1.32 billion in the same period of 2024. This growth was largely driven by improved sales execution and higher demand for NCR’s technology and payment automation solutions, reflecting better market traction and renewed customer engagement. Cost of sales increased by 11.5% to ₦1.18 billion, but remained below the pace of revenue growth, resulting in a gross profit of ₦321.9 million, up 23.6% from ₦260.6 million in 2024. This suggests improved pricing strategy and better input cost management, potentially due to local sourcing initiatives and operational streamlining.

Operating Income and Expenses

Other income, primarily from ancillary services and asset disposals, declined 35.3% year-on-year to ₦36.7 million, reflecting reduced one-off gains compared to the prior year. Distribution expenses reduced substantially by 51.0% to ₦28.9 million, implying enhanced cost control and more efficient logistics. Meanwhile, administrative expenses dropped sharply from a massive ₦2.91 billion in 2024 to just ₦91.7 million in 2025. This dramatic reduction signals a significant restructuring effort or write-offs in the previous period that are no longer recurring. Consequently, operating profit stood at ₦237.98 million, compared to a loss of ₦2.65 billion in 2024, reflecting a solid turnaround in operational performance.

Balance Sheet Analysis

Asset Position

Total assets grew by 19.7% to ₦5.30 billion in September 2025 from ₦4.43 billion at the end of 2024, reflecting improved working capital and liquidity strength. Key asset movements include:

• Trade and other receivables rising to ₦3.95 billion (from ₦3.41 billion), suggesting increased credit sales or project-based receivables.
• Cash and cash equivalents surged to ₦986.2 million, up 88.7%, underlining improved cash generation and liquidity management.
• Inventories, however, declined to ₦243.2 million (from ₦369.1 million), likely due to better stock utilization and supply chain optimization.

Non-current assets, at ₦97.2 million, represented a slight decline of 10.9%, reflecting modest depreciation and limited new capital expenditure during the period.

Capital Structure and Liabilities

Despite the improved profitability, NCR maintains a negative shareholders’ equity of ₦4.57 billion, although this marks a slight improvement from ₦4.81 billion in December 2024. The retained loss position remains the major drag on equity, though the current profit suggests a gradual rebuilding of capital reserves if profitability sustains. Total liabilities increased by 6.9% to ₦9.87 billion, driven mainly by higher trade and other payables, which rose to ₦7.04 billion from ₦6.49 billion. The contract liability component also rose to ₦251.7 million, reflecting growth in customer advances and deferred revenue from ongoing service contracts.

Earnings and Profitability Metrics

• Earnings per share (EPS) improved significantly to ₦2.20, from a loss per share of ₦24.57 in 2024, signaling a strong recovery in shareholder value.
• The gross margin expanded modestly to 21.5%, compared to 19.8% previously, confirming enhanced cost efficiency.
• With no tax expense recorded for the period, the company’s effective tax rate remained at zero, likely due to accumulated tax losses from prior years.

Strengths

• Strong Revenue Growth: Double-digit topline expansion underscores market recovery and resilient demand.
• Effective Cost Optimization: Sharp reduction in administrative and distribution expenses lifted profitability.
• Improved Liquidity: Cash reserves nearly doubled, enhancing operational flexibility.
• Positive Turnaround: Return to profitability after significant prior-year losses indicates renewed stability.

Weaknesses

• Negative Equity Position: Persistent accumulated losses continue to weigh on the balance sheet.
• High Payables Exposure: Growing trade and other payables raise concerns about short-term liquidity pressure.
• Declining Other Income: Reduced non-core income may constrain overall revenue diversification.
• Limited Asset Investment: Modest capital expenditure could slow future capacity expansion.

Outlook

NCR (Nigeria) Plc appears to be on a recovery path, supported by revenue resilience, disciplined cost management, and improved operational focus. The company’s ability to sustain profitability in subsequent quarters will depend on maintaining efficient working capital cycles and further strengthening its equity base.

With the increased adoption of digital and self-service banking solutions in Nigeria, NCR stands strategically positioned to benefit from growing demand for payment automation and technology infrastructure. However, managing receivables and addressing the negative shareholders’ equity remain critical to long-term financial sustainability.

Analyst Commentary (Interpretation and Implication)

NCR’s half-year performance demonstrates commendable progress in its turnaround strategy, with strong indications of operational recovery. The significant reduction in expenses suggests management’s commitment to efficiency and profitability restoration. Going forward, investors will keenly watch whether the company can sustain these earnings while addressing balance sheet weaknesses. A consistent trend of positive results could pave the way for capital restructuring or fresh equity injection, restoring investor confidence. Overall, NCR (Nigeria) Plc’s 2025 performance reflects a return to operational profitability, signaling strategic recovery momentum and offering a cautiously optimistic outlook for the medium term.