Trancorp Hotels reports N15bn revenue despite economic headwinds

…Declares 40k/share dividend.

Transcorp Hotels – the hospitality subsidiary of Transnational Corporation of Nigeria (Transcorp) – has reported a turnover of N14.6 billion for 2016, a nine per cent rise from 13.4 billion posted in 2015 financial year.

The company’s 2016 Gross profit at N11 billion, exceeded previous year’s records of N10.3 billion by 7 percent. Profit before Tax, however dropped slightly from N5.5 billion in 2015 to N5.2 billion But Profit After Tax showed a 4 percent improvement to N3.7 billion, from N3.6 billion the previous year despite the country’s prevailing economic crisis, which has affected demand for luxury hotel accommodation.

The hotel maintained a stable balance sheet with total assets standing at N89 billion as against N88 billion in 2015, while total liabilities reduced by N1bn to N35 billion according to its financial report.

At the Hotel’s 3rd Annual General Meeting on Wednesday, the Chairman, Olorogun O’tega Emerhor explained to shareholders that the company recorded strong performance because it continued to reinvent its offerings, keeping with service excellence.

According to him, the company maintained market leadership in its flagship property, closing the year with an occupancy rate of 60% well ahead of competition.  This according to him ensured Transcorp delivered a resilient performance even in the face of the impact of economic recession concerning the hospitality industry which has seen occupancy for large hotels drop below 35%.

“The company’s bottom line was affected by the ongoing upgrade of Transcorp Hilton Abuja, which reduced the number of rooms available for sale,” the Chairman, however, told the shareholders.

“2016 was a year of notable achievements for Transcorp Hotels Plc, despite the strong economic headwinds. The upgrade of Transcorp Hilton Abuja is underway in harmony with our commitment to stakeholders to build Africa’s choice hospitality assets”, Emerhor said.

He noted that, in validation of Transcorp Hilton Abuja as the prime hotel property in Abuja, the hotel won numerous awards in 2016 and for the fourth year in a row emerged the proud recipient of several prestigious awards.
In his speech, the Chairman reminded the shareholders of the country critical economic conditions, which he said was affecting businesses negatively. He attributed the dire economic situations to reduced oil revenues, slow and improper policy response, falling commodity prices, chronic electricity shortages, among others.

At the meeting, he proposed a final dividend of 40 kobo for every share held which was unanimously endorsed by the shareholders.

Valentine Ozigbo, Managing Director, Transcorp Hotels, said that the company’s impressive records, despite economic headwinds were largely driven by their aggressive revenue drive, cost reduction as well as import substitution.

Reviewing the 2016 results, Ozigbo also noted that performance was helped by key events including visits by very high profile guests, many foreign heads of government and representatives of consulates. All this he said was due to aggressive business development.

“Our major priorities now are creating value for our stakeholders, improving customer service for our guests and maximizing shareholder value, and we believe very strongly that the foundation that we are laying by the current upgrade and refurbishment of the Transcorp Hilton Abuja and repositioning of Transcorp Hotels Calabar are certain to yield very positive results,” he said.

“ On this premise I am happy to add that our turnaround initiatives for Transcorp hotels Calabar is equally paying off as the Hotel recorded laudable profit for the first time since 2012”. This
development he explained was predicated on strategy of increasing occupancy and proactive cost management”. Ozigbo added.

Looking up to 2017, Ozigbo raised concerns that the company’s financial performance in 2017 could be affected by ongoing massive expansion especially in its Abuja outlet; persisting economic headwinds coupled with significant impact of the six weeks Abuja airport closure for repairs.

He assured, however, that the company will keep up with the tempo to sustain the financial performance in 2017, despite the impacts of the temporary airport closure. He also confirmed that the company is on track to deliver on the ongoing upgrade of Transcorp Hilton Abuja as preparations get on for the 30th anniversary of the hotel in the 2nd quarter of this year.

The shareholders, while approving the proposed dividend commended the management and staff of the company for recording a strong financial and operational performance in the financial year ended December 2016.

Speaking on behalf of shareholders, Boniface Okezie, Chairman, Progressive Shareholders Association of Nigeria, PSAN, expressed appreciation to the hotel’s’s board and management for paying dividend at a period when the country’s economy is in dire straits, leading to significant drop in hotel occupancy.

 

Onyinye Nwachukwu