Transnational Corporation (Transcorp) has recorded its highest revenue in seven years, a BusinessDay analysis has shown.
According to data compiled by BusinessDay, the half-year 2023 amounted to N82 billion, a 30.6 percent increase from N62.89 billion recorded in the same period of 2022.
This growth was observed across the company’s key portfolios, including hospitality (N18.98 billion), power, (N63.14 billion), and corporate centre (N6.48 billion).
On a quarterly basis, revenue for the second quarter of 2023 amounted to N49.73 billion a 57.9 percent increase from N31.5 billion recorded in the same quarter of 2022.
“Transnational Corporation of Nigeria Plc reported a 57.9 percent YoY growth in its Q2’23 topline to N49.73 billion, the highest growth in seven quarters, which reflected security improvements in the country’s Oil & Gas sector as well as the 240 Mw increase in available capacity,” CardinalStone said in its report
“These effects drove power revenue higher by 65.6 percent YoY to N38.99 billion. The hotel business also continued its outperformance with a 35.0 percent YoY growth in Q2’23 revenue to N10.73 billion,” CardinalStone added.
the conglomerate saw its input costs grow at a slower pace of 22.7 percent, amounting to N39 billion over the period, up from N31.78 billion in the same period of 2022. This led to a 39 percent increase in gross profit, reaching over N43 billion at the end of June 2023.
However, Input cost rose by 32.6 percent to N20.7 billion in the second quarter from N15.62 billion recorded in the same quarter of 2022.
Administrative expenses increased to N14.13 billion in the first half of 2023, up from N10.89 billion in the same period of 2022.
Profit after tax saw a 34 percent increase, reaching N16 billion in the first half of 2023, compared to N12 billion in the same period of 2022.
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Additionally, quarterly profit soared to N14.2 billion in the second quarter of 2022 from N6.97 billion recorded in the same period of 2022.
During the review period, there was a notable surge in foreign exchange loss, reaching N4.8 billion in the first period of 2023, up from N1 billion recorded in the same period of 2022.
“Further down the P or L, the passthrough of the higher EBIT margin to PAT margin was muted due to a 362.6 percent surge in FX losses to N4.8 billion,” CardinalStone said.
Net finance costs saw a growth of 8.6 percent, reaching N6.6 billion in the first half of 2023 from N6 billion in the same period of 2022.
However, other income experienced an increase totalling N1.9 billion from N723 million recorded in the first half of 2022. Net other gains recorded a profit of N658 million from a loss of N123.3 million
Net cash flows generated from operating activities increased by over 300 percent to N31.8 billion in the first half of 2023, compared to N7.47 billion in the same period of 2022.
“Transcorp managed its overall working capital by deferring some of its payments as payables rose by N33.0 billion. Consequently, overall operating cash flows came in higher at N31.8 billion (versus N7.5 billion in the prior period) reflecting the improved operating performance,” CardinalStone said.
Net cash flows used in investing activities recorded a loss of N17.84 billion in the period under review, compared to a loss of N3.55 billion in the same period of 2022.
Net cash flows used in financing activities also recorded a loss of N11.9 billion in the first half of 2023, up from a loss of N10.43 billion recorded in the same period of 2022.
At the end of the period, the company’s cash and cash equivalents amounted to N10.34 billion, compared to N5.32 billion in the same period of 2022.
“Overall, H1’23 numbers were positive despite the slow Q1’23, with H1’23 revenue growing by 30.6 percent YoY to N82.12 billion. Elsewhere, gross and EBIT margins improved by 3.19ppts and 3.90ppts, respectively, due to the lagged impact of the passthrough of a weaker naira on gas pricing, we expect the impact of higher gas prices to be mostly felt in the remaining quarters of the year,” CardinalStone said.
