Geregu Power Plc, the first electricity company to be listed on the Nigerian Exchange Group (NGX) has more cash than they know how to spend it, and of course, a strong balance sheet provides them the firepower to ward off any macroeconomic headwinds.
Data sourced from the Nigerian Exchange Group showed the firm recorded a 366 percent surge in its cash reserves during the first half of 2023.
This surge in cash reserves for Geregu Power resulted from an increase in cash from operating activities and also in profit in cash from investing activities after a loss was recorded in the same period of 2022.
During the first half of 2023, Geregu Power reported a total of N44.3 billion in cash and cash equivalents, compared to N9.5 billion recorded in the corresponding period of the previous year.
BusinessDay’s analysis showed that Geregu Power experienced a profit of N3.7 billion in cash from investing activities during the first half of 2023, from a loss of N4.23 billion incurred during the same period in 2022.
The positive shift in cash from investing activities can be attributed to interest received, which amounted to N4.58 billion in the first half of 2023 from N0.57 billion recorded in the same period of 2022.
Furthermore, cash from operating activities witnessed a 27.85 percent increase, rising to N31.31 billion in the first half of 2023 from N24.49 billion recorded in the same period of the previous year.
The increase in cash from operating activities rests on an increase in trade and other payables, trade and other receivables, as well as a profit recorded in inventories.
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In the first half of 2023, net cash generated or used in financing activities incurred a loss of N41.66 billion, compared to a loss of N13.33 billion recorded in the same period of 2022.
Profit after tax experienced a loss of 11.5 percent, amounting to N8.05 billion in the first half of 2023, down from N9.1 billion in the same period of 2022.
Income tax marginally decreased by 0.91 percent to N4.42 billion in the first half of 2023, compared to N4.38 billion recorded in the same period of 2022.
Other income from foreign exchange gains recorded an increase, amounting to N11.34 million in the first half of 2023, compared to N3.26 million recorded in the same period of 2022.
Operating expenses amounted to N2.42 billion in the first half of 2023, up from N1.73 billion recorded in the same quarter of 2022.
Finance cost also experienced a substantial increase of 268.26 percent, reaching N6.15 billion in the first half of 2023, compared to N1.67 billion recorded in the same period of 2022, primarily due to an increase in the interest rate on borrowing.
However, finance income showed significant growth of 709 percent, totalling N4.58 billion in the first half of 2023, compared to N0.566 billion recorded in the same period of 2022.
The increase in finance cost was a result of a rise in interest income on bank deposits, amounting to N3.17 billion in the first half of 2023, driven by the successful increase in the interest rate by the Central Bank, as opposed to N88.79 million recorded in the same period of 2022.
