Power sector favors Transcorp as profit hits 9-year high –
Transnational Corporation of Nigeria Plc, in its recently published half-year (H1) financial statements on the Nigeria Exchange Group (NGX), announced its highest profit in nine years, with the company’s energy operations segment contributing to 84.59% of total profit in the period, according to BusinessDay findings.
Its profit after tax increased by 84.77% to N12.01 billion in the first half of 2022 from N6.50 billion in the first half of 2021.
The company’s revenue also increased by 18.08% to N62.89 billion in the first half of 2022 from N53.26 billion in the corresponding period of 2022, the revenue highest semester recorded by the company in 9 years.
On a quarterly basis, revenue increased by 0.35% to N31.50 billion in the second quarter (Q2) of 2022 from N31.39 billion in the first quarter (Q1) of 2022.
A further breakdown of the operating segments shows that the energy segment of the business contributed the bulk of 76.16% to N47.90 billion in the first half of 2022. However, the energy segment hotel business grew the most by 70.81% to N14.98 billion in the first quarter. of 2022 compared to 8.77 billion naira for the corresponding period of 2021.
Similarly, its energy operating segment also grew by 7.66% to N47.90 billion in the first half of 2022 from N44.49 billion in the first half of 2022, while its Business Center operations increased by 48.2% to N4.52 billion in the first half of 2022. N3.05 billion in the reporting period.
Commenting on the performance, Owen Omogiafo, Group Chairman/Chief Executive of Transcorp, attributed the group’s continued strong performance to growth in its energy and hospitality businesses, which continued to excel despite the challenging operating environment.
Omogiafo said: “In our electricity sector, despite the challenges of grid instability and gas reliability, we have seen considerable growth in our electricity investments, with an increase in our available capacity. of 21% (100 MW) compared to last year and an improvement in our overall operational efficiency. We have continued to make progress with our OPL281 investment and are on track to achieve our integrated energy strategy and increase returns for all stakeholders.
The conglomerate company’s cost of sales rose 6.82% to N31.78 billion in the first half of 2022 from N29.75 billion in the first half of 2021, with natural and fuel costs accounting for 67, 56% of total cost of sales during the period. .
However, repairs and maintenance, food and beverage and rooms were the main drivers of the increase in the cost of sales, with repairs and maintenance increasing by 372.27% to reach 2.98 billion. naira, food and beverages increased by 80.56% to 2.60 naira. billion, and rooms increased by 70.7% to reach N1.34 billion in the first half of 2022.
The company’s administrative expenses during the period increased by 45.20% to N10.89 billion in the first half of 2022 from N7.50 billion in the corresponding period last year.
Transcorp Group recorded a decrease in net finance costs of 23.84% to 6.07 billion naira in the first half of 2022, compared to 7.97 billion naira in the previous period (1st half of 2021).
The decline in finance charges can be attributed to a sharp decline in interest charges despite the increase in interest income to N521.1 million in the first half of 2022 from N304.7 million in the first half of 2021.
Interest expense decreased by 20.41% to N6.59 billion in the first half of 2022 from N8.28 billion in the corresponding period of 2021.
Similarly, foreign exchange loss on borrowings decreased by 20.61% to N1.04 billion in the first half of 2022 from N1.31 billion in the first half of 2021.
The company’s total registered assets increased by 16.45% to N417.19 billion in the first half of 2022 from N358.26 billion in the first half of 2021.
Equity of Transcorp Group during the reporting period amounted to N157.49 billion, an increase of 31.41% from N119.85 billion in the first half of 2021.
Businessday’s analysis to measure the rate of return owners of a company’s common stock receive on their holdings shows a return on equity (ROE) of 14.31% in the first half of 2022.
The conglomerate company’s cash and cash equivalents, which indicate the value of a company’s assets that are in cash or can be converted into cash immediately, amounted to N5.32 billion in the first half of 2022, down 68.18% from N16.72 billion in the first half. of the previous year.
The company generated 5.19 billion naira from its operating activities in the first half of 2022, down 77.84% from the 23.42 billion naira it generated in the first half of 2021.
The conglomerate reported negative cash flow used in investing activities of N-3.55 in the first half of 2022 due to the large cash outflow in the period.
Also Read: Transcorp Group Announces 32.3% Increase in Revenue, Total Assets Reach N416 Billion
A breakdown of cash flow used in investing activities shows that the Transcorp Group paid interest amounting to N521.09 million and invested in the purchase of fixed assets amounting to N3 .31 billion naira, in the first half of 2022.
Its cash inflow from investing activities during the period was derived from dividend income on equity securities and proceeds from the sale of property, plant and equipment, which amounted to N128.68 million and N128.68 million, respectively. N151.36 million.
Similarly, its net cash flow used in financing activities was negative, amounting to N10.42 billion in the first half of 2022 due to the net movement of borrowings, interest and dividend payments during the period, which amounted to 3.02 billion naira, 6 billion naira. 0.59 billion and 812.96 million naira respectively.
The conglomerate reported total borrowings of N103.06 billion in the first half of 2022, down 17.58% from the N125.04 billion reported in the first half of 2021.
Businessday’s analysis to measure the extent to which equity can meet obligations to its creditors, in the event of a downturn, shows a leverage ratio of 17.90%.
The company reported earnings per share (EPS) of N14.40 per share in the first half of 2022, up 82.05% from N7.91 billion in the first half of 2021.
Owen Omogiafo said, “Across all of our businesses, we are relentless in executing our transformation and growth agenda and are pleased with the results achieved so far. We have invested strategically over the years in long-term projects and businesses that continue to generate productive returns and position the Transcorp Group as an institution that delivers value to all stakeholders and transcends many generations.
According to her, Transcorp Group is fully prepared to maintain its growth trajectory for the rest of the year and beyond, despite the macro-economic problems. “We do not intend to rest on our laurels, and we will continue to surpass past performances” assured Owen Omogiafo to his stakeholders.
Transnational Corporation of Nigeria Plc is a diversified conglomerate with business interests in the power generation, hospitality, and oil and gas sectors.
It owns and operates the Transcorp Hilton Hotel in Abuja and the Transcorp Hotel in Calabar. In the energy sector, the company is involved in upstream oil development and has interests in refining exploration and oil and gas marketing.
Other business interests include power generation, maritime operations and the supply of products for the mining and construction sectors, including stone, sand, lime and iron. Transnational Corporation of Nigeria Plc is headquartered in Lagos, Nigeria.