Despite rising macroeconomic challenges such as gas supply constraints, foreign exchange volatility, and rising inflation, Transnational Corporation Plc (Transcorp) has reported a 41.35 percent increase in profits for the period ending September 2022.
The firm’s profit surged to N19.04 billion in the nine-month period that ended September 2022 from N13.47 billion in the corresponding period of 2021, representing the highest profit reported by the company in 11 years.
Further analysis of the financial statement shows the hospitality segment of the company remained a primary driver for the growth in profit, as the segment’s profit before tax grew by 353 percent to N3.39 billion in 9M’2022 from N749.4 million in 9M’2021.
On the other hand, profit before tax was reported by its power and corporate centre generating segments grew by 18.8 percent and 141 percent to N19.69 billion and N5.44 billion respectively in the nine-month period that ended in September 2022.
Transcorp also reported its highest revenue in 11 years, growing by 12.06 percent in 9M’2022 to N96.25 billion from N85.89 billion in 9M’2021.
Growth in its hospitality segment was also responsible for the boost in revenue as revenue generated from the hospitality segment grew by 55 percent to N22.65 billion in 9M’2022 from N14.60 billion in 9M’2021.
Analysis of revenue by category shows that revenue generated from both its rooms category, and food and beverages category grew by 52.87 percent and 71.97 percent respectively to N14.11 billion and N6.81 billion in 9M’2022.
Despite soaring inflation, the cost of sales slowed by 7.20 percent to N49.55 billion in the nine-month period that ended September 2022 from N46.22 billion in the corresponding period of 2021.
Consequently, the net profit margin was up by 410 basis points to 19.78 percent in 9M’2022 from 15.68 percent in 9M’2021.
On account of the increase in electricity and diesel costs, administrative expenses surged by 30.88 percent to N15.98 billion in 9M’2022 from N12.21 billion in 9M’2021.
The conglomerate reported a slowdown in impairment losses recorded on its financial assets to N285 million in 9M’2022 from N556 million in 9M’2021.
Other income generated by the conglomerate surged by 28.93 percent to N1.23 billion in 9M’2022 from N954 million in 9M’2021.
Despite the high-interest rate environment, net finance costs declined by 14.88 percent to N9.61 billion in 9M’2022 from N11.29 billion in 9M’2021.
Foreign exchange loss on borrowings also declined by 47.76 percent to N1.05 billion in 9M’2022 from N2.01 billion in 9M’2021.
Total assets appreciated by 18.46 percent to N421.18 billion in the nine-month period ended September 2022 from N355.55 billion in the same period last year.
Total shareholder’s equity also increased by 27.43 percent to N161.8 billion in 9M’2022 from N126.97 billion in 9M’2021.
Cash and cash equivalents grew marginally by 2.16 percent to N9.92 billion in 9M’2022 from N9.71 billion in 9M’2022.
Net cash flow generated from operating activities declined by 42.25 percent in the nine-month period ended September 2022 to N15.42 billion from N26.7 billion in the corresponding period of 2021.
The conglomerate spent money purchasing property, plants, and equipment which amounted to N2.70 billion, and paying interest amounting to N829 million during the period, bringing net cash flow from investing activities to N-3.26 billion in 9M’2022.
Net cash flow used in financing activities totaled N-16.34 billion in 9M’2022, due to movement n borrowings (N2.59 billion), the dividend paid (N3.31 billion), and interest paid (n10.44 billion) during the period.
Transcorp reported earnings per share of N21.93 per share in the nine-month period that ended September 2022.
Transnational Corporation Plc (Transcorp Group), is a diversified conglomerate with strategic investments in the power, hospitality, and energy sectors. Owners of Transcorp Power Ltd, TransAfam Power Ltd, Transcorp Hotels Plc, and Transcorp Energy Ltd, Transcorp Group is committed to creating value and socio-economic impact by improving lives and transforming Nigeria through its business operations and initiatives.