Transcorp: Robust Returns On Investment Amid Expansion

Transnational Corporation Plc (Transcorp) Plc, expansion in key sectors in Nigeria has continued to bring to shareholders robust returns on investment amid global and domestic challenges.

Financial Performance

The diversified conglomerate in Power, Oil & gas, Hospitality in 2022 financial year paid a dividend of N2.03 billion as against N812.96 million in 2021, being five kobo per share on the outstanding ordinary shares of 40.648 billion shares of 50 kobo each for 2022.

The growth in dividend payout was on the back of impressive performance across all its subsidiaries, most especially the Power sector that contributed about 77 per cent or N103.3 billion out of N134.72 billion of total revenue reported in 2022.

Other sectors, Hospitality contributed 23.3 per cent or N31.44 billion in revenue, while Corporate centre hits N10.32 billion in revenue from N5.13 billion reported in 2021.

Overall, the Group closed 2022 with N134.72 billion revenue, an increase of 21 per cent from N111.22 billion in 2021, while profit before tax increasing to N30.28 billion in 2022, representing an increase of 8.1 per cent from N28 billion reported in 2021.

Also, the Group in first quarter (Q1), 2023 declared N32.39 billion revenue, representing an increase of 3.30 per cent from N31.39 billion in Q1 2022. The increase in revenue was primarily driven by N24.14 billion generated from the Power, followed by N8.25biillion from Hospitality in the period under review.

The Group reported N18.17 billion cost of sales in Q1 2023, an increase of 12.4 per cent from N16.16 billion in 2022, fuelled by N13.37billion Natural gas and fuel costs in Q1 2023 from N12.11 billion reported in Q1 2022.

This brings gross profit to N14.22 billion in Q1 2023 from N15.23 billion in Q1 2022 as gross profit margin stood at 43.89 per cent in the period under review as against 48.5 per cent in corresponding period of 2022.

Total operating expenses moved to N5.64 billion in Q1 2023 from N4.29 billion in Q1 2022 over hike in inflation rate as the Group Impairment (loss) on financial assets closed Q1 2023 at N77.62 million as against N135million reported in Q1 2022.

The Group, closed Q1 2023 with N2.85 billion and N1.86 billion profit before tax and profit after tax respectively in Q1 2023.

Management View

Group chairman, Tony Elumelu, noted that the Group recorded significant improvements across all key financial and non-financial parameters in 2022, saying “2022 proved to be another strong year for Transcorp, we continued to optimize and expand our portfolio of investments, amidst a challenging operating and economic environment.

“The impact of our long-term investment approach is beginning to be appreciated by the market, with a growth in share price from N0.96 in January 2022 to N2.50 as at close of market yesterday, April 25, 2023. And we continue to deliver to investors, with a dividend of N2 billion being paid to shareholders, representing a 150 per cent increase over the 2021 payment.”

According to him, 2022 will be the fifth consecutive year of unbroken dividends payment by Transcorp, since the Elumelu led team assumed leadership of the conglomerate. Prior to the change in ownership and management in 2011, Transcorp had operated since inception without dividends to its shareholders.

Speaking on the Group’s performance, the president of Transcorp Group, Dr. Owen Omogiafo, stated that the Group’s success is attributable to its focus on key sectors of the economy, its commitment to investment and its ability to drive execution.

“We are strategically positioned and committed to enhanced performance, providing value-adding returns for all stakeholders, and making a positive societal impact. As we move forward, we remain fully dedicated and focused on realizing this vision. With the relentless efforts of our team, we are poised to achieve remarkable growth and success for years to come,” Omogiafo said.

Shareholders View

Shareholders at the recently held annual General Meeting of the Company lauded the company’s professionalism and commitment to growing value for shareholders.

Speaking, Dr. Faruk Umar of Advancement of Shareholder Rights Association said “we are very happy with the Board and Management of Transcorp. They promised us that as the Company grows, value for shareholders will grow. Today we have seen our dividend, that has increased by 500 per cent under the Elumelu leadership and our share price has also appreciated.

“We also want to commend the professionalism of the Board for deciding to hold the AGM virtually, making it easier for us to join and make all of us to be more informed.”

Transcorp’s commitment to social responsibility was also highlighted at the AGM. The Group has continued to contribute to Nigeria’s sustainable development, particularly in the areas of education, community development, and environmental sustainability.

As a responsible corporate citizen, Transcorp embraces Environmental, Social, and Governance (ESG) criteria in all aspects of its business dealings and investment decisions. Transcorp remains unwavering in its commitment to sustainable growth, ensuring consistency and an efficient organisation driven by a mission to deliver long-term value.

Transnational Corporation is a publicly quoted Conglomerate, with a diversified shareholder base of approximately 300,000. Its portfolio comprises strategic investments in the power, hospitality, and oil and gas sectors. Its businesses include Transcorp Hilton Abuja, Transcorp Hotels Calabar, Aura by Transcorp Hotels, Transcorp Power, Transafam Power, and Transcorp Energy.