eTranzact posted stronger sales in the first half of 2026, yet profitability and cash flow deteriorated, leaving shareholders with a weaker earnings profile despite higher turnover. The payments firm recorded ₦16.28 billion in revenue for H1 2026, up from ₦13.28 billion a year earlier, driven by continued deployment of agent banking and point-of-sale infrastructure.
Costs rose faster than sales. Cost of sales climbed 39% to ₦9.50 billion from ₦6.84 billion, lifting gross profit only 5.1% to ₦6.78 billion and compressing gross margin by 690 basis points to 41.6% from 48.5% in H1 2025. On the expense side, administrative costs increased 21.9% to ₦4.81 billion, while selling and marketing expenses fell 11.9% to about ₦377 million. The result: operating profit dropped 23.2% to ₦1.59 billion, from ₦2.07 billion in the prior period.
Finance income provided a small offset, rising from N88 million to N150 million, but profit before tax still declined 19.1% to ₦1.75 billion and profit after tax fell to ₦1.22 billion. Capital expenditure remained elevated at roughly ₦1.23 billion for the half, with about ₦850 million allocated to POS deployment, reflecting the company’s push to scale transaction volumes.
The cash-flow picture deteriorated sharply. Payments to suppliers and employees almost doubled to about N21 billion, and operating cash flow swung from a positive N1.14 billion in H1 2025 to a negative N6.86 billion in H1 2026. That swing amplifies funding pressure as eTranzact expands its network.
Structural headwinds complicate the plan. The NIBSS NIP switching fee has been cut progressively, from N5 per transaction before 2023 to N3.75 in July 2023 and N2 in January 2026, with a zero-fee model targeted by the end of 2026. The industry is also transitioning toward the National Payment Stack, which recorded its first live transaction in November 2025 and is expected to supplant existing NIBSS NIP rails. Those shifts mean eTranzact will need substantial volume growth to offset falling revenue per transaction.
Ownership also shifted during the period. As of June 30, Trademarks Global Concepts Limited held a 56.18% stake, taking controlling interest from Access Bank Nigeria Plc’s previous 37.56% position, while eTranzact Global Limited’s holding declined from 22.50% to 14.49%.
The results follow a mixed start to the year. eTranzact reported N4.2 billion profit before tax for 2025 in February 2026, down from N5.02 billion in 2024. The stock also traded heavily on March 18, when 5.1 billion eTranzact shares changed hands, the largest single-stock volume that day, contributing to total market volume of 6.06 billion shares as the All-Share Index fell 0.69% to 201,156.8 and market capitalisation eased to N129.1 trillion.
Compounding operational and market pressures, the company faces a legal matter linked to alleged fraudulent transactions, after a Federal High Court order required 12 banks and six fintech platforms to place about 69 accounts on post-no-debit restriction over alleged fraudulent and unauthorised credit transactions. Looking ahead, eTranzact must convert its investment in agents and POS into higher transaction volumes, and rein in costs, to offset shrinking per-transaction fees and restore cash generation before the zero-fee environment arrives.
