Transcorp Hotels sustains profitability despite headwinds, posts N3bn profit

Transcorp hotels Plc has reported a moderate decline in its 2017 financial performance as the six weeks closure of Abuja airport for runway rehabilitation, coupled with the ongoing renovations/expansion at the Abuja Hilton hotels impacted business and in turn its revenues.

Despite the headwinds, the hotel, sustained profitability, with a N12.9 billion turnover for the year, though, lower than the N14.6 billion reported in 2016.The hotel recovered a N9.5 billion gross profit, as against N10.9 billion the previous year while Profit Before Tax and Profit After Tax  all moderated to N3.6 billion and N2.6  billion respectively as agonist N5.2 billion and N3.7 billion.

“Revenue lost during the cancellation of key foreign delegations and fewer numbers of rooms for sale due to the ongoing refurbishment of our flagship hotel in Abuja affected the company’s performance,” Olorungo O’tega Emerhor. Outgoing Chairman, Transcorp Hotels told shareholders at their Annual Gem

General Meeting (AGM) held in  Abuja at the weekend.

He however assured of the company’s better performance in 2018, disclosing plans to improve revenue by taking advantage of a potential increase in economic and political activities.

According to him, the company “projects over 70 percent occupancy and an average room rate in excess of N80,000 for its Abuja outlet and 65 percent occupancy for at an approximately N20,000 average room rate for the Calabar hotel.

He said in addition that the ongoing renovation at the Transcorp Hilton Abuja would be completed by third quarter of 2018. “This will further enhance the exceptional customer experience and attract more business,” the Chairman assured.

Olorogun O’tega further noted that Transcorp Hotels, in 2017, remained the leading provider of excellent luxury hospitality services and the ultimate guest experience in Africa, and thus earned several awards including TripAdvisor Travelers’ Choice awards, Seven Stars Luxury Hospitality and Lifestyle Awards, World Luxury Restaurant Award 2017, 2017 World Luxury Hotel Awards, World Travel Awards and PEARL Awards, Emerhor said.

At the meeting, the  Shareholders unanimously approved the Board’s recommendation of a final dividend of  12.45 kobo per share expressing their confidence in the Company’s leadership ability to deliver on set goals despite the challenging economic and business environment.

Speaking at the meeting, a shareholder and the Chairman, Progressive Shareholders Association of Nigeria (PSAN), Boniface Okezie commended the management and staff of the company  for the remarkable growth it recorded amidst socio-political and economic challenges that impacted negatively on hotel occupancy. Okezie mentioned among others, the 6 weeks airport closure and the ongoing renovation of Transcorp Hilton Abuja.

“All of these in no small measure impacted the business significantly and would have affected the profit margins considerably instead what we have is a strong performance, and a substantial dividend payout of 12.45kobo.

“Indeed all of us should be proud as stakeholders in this business,” he said.

Muktar Muktar, President, Trusted Shareholders Association, also buttressed Okezie’s comments on what he termed the resilience of management and staff of the hotel weather the storm and produce exemplary results in 2017.

“In the midst of this, the hotel management under the Chairmanship of Olorogun O’tega Emerhor and MD/CEO, Valentine Ozigbo trudged on with hard work as well as numerous innovations which paid off hugely and this is proven in the reputable awards garnered in the last financial year,” Mukhtar said

In his review of the 2017 results, the Managing Director/Chief Executive Officer of Transcorp Hotels Plc, Valentine Ozigbo said that the Company achieved a remarkable feat considering the unexpected shocks it experienced in 2017 including the impact of the Abuja airport closure on the hotels operations and the closure of some floors for upgrade in the hotel, among many others.

“Global standards in service delivery propelled Transcorp hotels to retain its market leadership in luxury hospitality services and the hotel was able to achieve occupancy of 63%. In line with our core values of enterprise, execution and excellence, we closely monitored our operational costs without sacrificing on the quality of our services. Room rates and prices for our food, beverage and ancillary revenue sources were periodically reviewed in keeping with our superior offerings” he said.

“Transcorp Hotels Calabar achieved occupancy of 57% and has sustained its profitable position with a Profit Before tax of N90million and Profit After Tax of N60million. This was the outcome of the successful strategies put in place to boost revenue and control running expenses in the hotel” Ozigbo stated.

Speaking on 2018 prospects, Ozigbo maintained that “the transformation that we are bringing to bear in the hotel will guarantee our leadership position and indeed better pricing.

“We will consistently apply innovative approaches towards enhancing the visibility and profitability of Transcorp Hotels Calabar achieving occupancy of 65% in 2018.”

Also at the meeting, a new Chairman of the board of the company, Abdulkadir Jeli Bello was announced to replace Olorogun O’tega Emerhor who had served on the board  for 10 meritorious years.  The new Chairman is Alhaji

Bello is an experienced financial professional with over 27 years of extensive experience in the banking and financial services industry having at various times held positions such as Group Chief Credit Officer of UBA and  Executive Director North. He holds a BSc in Accounting from the Bayero University, Kano and became an Associate member of the Institute of Chartered Accountants of Nigeria in 1990 and was subsequently conferred with a fellowship of the Institution in 2016. He is also a fellow of the Institute of Credit Administration.

Onyinye Nwachukwu, Abuja