Premium Pension Limited’s Profit after Tax (PAT) has been dropping since 2019.
The Pension Fund Administrator’s (PFA) profit, which stands at N2.55 billion in 2018 financial year, dropped by N302 million in the 2019 to N2.53 billion.
This represents a 12 % drop
The downward trend of the company’s profits continued in 2020 and last year compared to 2019 and 2020 financial year by N222 million and N72 million, that is 10 per cent and four per cent drop.
The PFA recorded N2.03 billion PAT in 2020 and N1.95 billion last year.
Going by global accounting standard, a consistent drop in profit is of major concern.
If the situation does not improve, the company risks erosion of its profit, and its survival.
Further analyses of the PFA’s result shows that the major reason for the drop in profit is due to reduction in revenue.
The revenue dropped by N269 million in 2019 but it stagnated in 2020.
Although it improved last year by nine per cent, this was not enough to bring about increase in profit compared to the previous year.
Another reason for the drop in profit can be attributed to increase in expenses, which have been on the rise since 2018. While the PFA’s expenses increased, its revenue kept nose-diving.
Experts said for a company to make profit, its revenue must exceed its expenses.
If expenses outweighs revenue increase, the company may run into losses and its survival will be threatened.
But, the company recorded Assets under Management (AUM) of N885.05 billion in 2021 from N787.80 billion posted in 2020, representing 12.34 per cent growth.
In a statement, the firm’s Head, Corporate Communications, Aliyu Mohammed Ali, quoted the Chairman, Premium Pension Limited, Ibrahim Alhassan Babayo, as stating these at the company’s 17th Annual General Meeting (AGM) in Abuja.
According to him, the total number of Retirement Savings Account (RSAs) registered in the public and private sector organisations as at last December 31, stood at 754,888.
He said: “Of the total RSAs, 453,466 had been funded as at the end of 2021, while the remaining is being engaged for funding.
The company’s Managing Director and Chief Executive Officer, Umar Sanda Mairami, however, assured that the company would be consistent in offering premium experience to its members.