Tony Elumelu, Shareholders Smile to Bank as Transcorp's Profits Surge to N34 Billion
- Transcorp achieved a remarkable milestone as annual profit doubled to N34.1 billion, according to its 2023 financial result
- The two-fold jump in annual profit was boosted by an impressive surge in energy revenue during the covered period
- Isaac Akinloye, a financial analyst, told Legit.ng that the robust financial performance reflected a strategic resilience amid economic challenges
Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the stock market.
Transnational Corporation of Nigeria (Transcorp) experienced a significant two-fold increase in net profit, reaching N34.1 billion during the 2023 fiscal year.
This was contained in the company's unaudited condensed consolidated and separate financial statements for the period ending on December 31, 2023.
The report, submitted to the Nigerian Exchange Group, highlighted the doubling of annual profits attributed to a notable rise in energy income.
Source: UGC
Surge in energy income
The conglomerate's core, accounting for 78% of gross revenue, lies in the energy sector, with additional divisions dedicated to agro-allied business and hospitality.
The leading subsidiary witnessed a surge in turnover, escalating from N103.3 billion to N151.3 billion compared to the previous year, thereby propelling the overall gross revenue to a 44% increase, totalling N194 billion.
Transcorp Power boasts a collective installed generating capacity of 2,000 megawatts across three power plants.
Surge in finance costs, post-tax profit
Transcorp experienced a surge of approximately 60% in finance costs for the year, primarily driven by the heightened expenses associated with servicing foreign debt.
This increase comes from the substantial depreciation of the naira's value, resulting from multiple foreign exchange reforms during the year, adversely affecting the conversion rate of the local currency to the dollar.
The company's profit before tax exhibited a remarkable 84.5% acceleration, reaching N55.9 billion, while post-tax profit advanced to N34.1 billion from the previous N16.8 billion.
In the short term, Transcorp's current liabilities exceeded current assets by a substantial 39.2% or N106.6 billion.
The trade and other receivables, representing funds owed by trade partners, witnessed a noteworthy increase to N140.3 billion from the previous N82.6 billion recorded a year ago.
In 2023, Transcorp emerged as the fourth-best-performing stock in Nigeria. Tony Elumelu, the chairman of Transcorp's board of directors, stands as the largest shareholder, holding approximately 36% of the company's stake along with his family.
Transcorp's strategic resilience amid economic challenges
Speaking with Legit.ng, Isaac Akinloye, a financial analyst at Core Investment, said Transcorp's robust financial performance in 2023 showed strategic resilience amid economic challenges.
He said:
The doubling of annual profits to N34.1 billion, driven by a surge in energy income, showcases the company's adaptability and effective leadership, particularly under the guidance of Chairman Tony Elumelu.
However, the notable increase in finance costs, attributed to servicing foreign debt amid currency devaluation, underscores the importance of managing external factors. The positive momentum and diversified portfolio, including agro-allied business and hospitality, position Transcorp as a key player in Nigeria's economic landscape.
He added that careful financial management would be pivotal for sustained success as the conglomerate navigates funding pressures and liabilities.
Transcorp Power acquires 60% of Abuja DisCo
In related news, Legit.ng reported that a Transcorp-led consortium had purchased a 60% stake in Abuja Electricity Distribution Company (AEDC).
This came after the major investor of Ughelli Power Plant was issued a discharge certificate by the federal government of Nigeria.
The Transcorp-led group received approval from the national council on privatisation to be the preferred bidder for AEDC in May 2023.
Christopher Ezeafulukwe, the MD/CEO of Transcorp Power Limited, was chosen to lead AEDC as managing director and chief executive officer (MD/CEO) following the acquisition.
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Source: Legit.ng
