Tony Elumelu, Chairman, Transnational Company of Nigeria Plc (Transcorp) has urged the federal government to commit more attention to the power sector and encourage more indigenous companies to invest.
This comes as the company which has its investments in the power, hospitality, oil and gas sectors of the economy posted impressive financial performance in 2018 and declared a 3k dividend for every 50k held by the shareholders.
Speaking at the companies 13th Annual General Meeting in Abuja, Elumelu said that though government had shown commitment to resolve systemic issues in the power sector like the Nigeria Bulk Electricity Trader’s N701bn Payment Assurance Plan (PAP), the eligible customers regulation, meter asset Providers initiative, among others, more still needed to be done.
According to him, “the resolution of the issues bogging thepower sector such as non-utilisation of load, inadequate transmission and distribution infrastructure, poor remittances by the distribution companies and full payment of outstanding debts owed GENCOs, is a critical success factor for the sector.”
Elumelu said for instance that the PAP which is an intervention fund has significangtly eased liquidity challe4nges in the power sector, but “did not address the huge outstanding payments due to the power Geneartion Companies (GENCOs) prior to their commencement as well as the accumulating shortfall of 20 percent of their invoices from 2017 till date.”
He told the shareholders that as a result of this, one of the subsidiaries – Transcorp Power still has significant amount of receivables with the electricity bulk trader.
He said that to enhance the company’s profitability, Transcorp Power continued to explore the opportunities created by Eligible customer regime of the federal government which allows the gencos to sell power directly to certain end users who meet the set out criteria.
Apart from the power sector, the company also leveraged gains in its hospitality and oil and gas businesses to post strong revenue and profit increase last year.
Addressing the shareholders, Elumelu said Trancorp Group recorded a 30 percent increase in gross earnings to N104bn from N80.3billion in 2017 while that for the company rose by 75 percent to N8.9billion from N5.1billion.
The Group’s operating income grew by 40 pecent to N34.6 billion as against N26 billion while operating income for the company rose by 85 percent to N7.6 billion comapared to N4.1 billion in 2017.
Profit Before Tax for the Group was recorded at N22.4 billion, having grown by 82 percent from N12. 3 billion the previous year while that for the company grew by 119 percent to N5.7 billion from N2.6 billion. Profit After Tax for the Group stood at N206billion compared to N10.6billion in 2017, representing 94 percent growth.
The Group’s total Assets grew by 4 percent N297.1 billion from N285.5 billion in 2017. Similarly, the company’s assets grew 5 percent to N66.4 billion from N63.1 billion.
Elumelu announced a dividend payout of 3k for each 50k share held which was endorsed by the shareholders at the meeting,
Noting that the country’s 2019 economic performance would largely depend on the outcomes of the just concluded elections and possible resultant reforms across key sectors, he assured on Transcorp’s commitment to its purpose of improving lives and transforming Nigeria, adding that they would continue to sustain strategic partnerships with key stakeholders.
“We closed the year 2018 work available capacity of over 600 Megawatt. In 2019, we plan to maintain the available capacity at this level.
“This will keep us on track to achieve our long term target to be responsible for generation of 25 per cent of Nigeria’s peer consumption needs.
“We will sustain our strategic partnership with gas suppliers and other stakeholders in order to ensure adequacy of the quantity and quality of gas supply.
“We will equally continue our engagement with Nigeria Bulk Electricity Traders and Federal Government in finding sustainable solutions that would result in full payment of the debt owed Transcorp Power by NBET.”
On the operations in the oil sector, Elumelu said Transcorp has successfully obtained approval for extension of phase one for exploration period of Oil Prospecting License 281 and that would be done under the Production Sharing Contract entered into with the Nigeria National Petroleum Corporation for additional period of two years.
“This (extension) has given us additional time to fulfil our work commitments, including drilling of the appraisal wells, under the first phase of the PSC.
The company’s CEO, Valentine Ozigbo said that growth and efficiency would remain the new strategy for the company.
He affirmed that 2018 was a fantastic year for the company despite huge challenges while anticipating a better outlook for 2019 and that the strategy to achieve this would be to deepen their plans in their hotel and power businesses.
Onyinye Nwachukwu, Abuja
