Transnational Corporation Plc Nigeria’s largest diversified conglomerate, with investments in power, hospitality, and oil & gas, on Thursday, April 20, 2023, held its analysts conference call, which offered an opportunity to discuss its 2022 full year and Q1 2023 financials and the outlook for the rest of the year.
Joseph Adegunwa, the Group’s Chief Financial Officer, who presented a comprehensive overview of the Group’s performance, highlighting key achievements across its portfolio, said the group sustained its growth trajectory and ended the year with gross earnings of N134.7bn, a 21% increase from N111.2bn recorded in 2021, largely driven by the power and hospitality businesses.
Gross profit grew by 21%, closing at N66.4bn in 2022, from N54.8 billion in 2021, despite what he noted was the adverse economic factors, as the Group reported a gross profit margin of 49%, despite the prevailing inflationary pressures.
Cost-to-income ratio reduced from 79% in 2021 to 78% in 2022, demonstrating the Group’s operating efficiencies.
Transcorp ended the year with a PBT of N30.3bn, an increase from N28bn in 2021, which resulted in an increase to the company’s asset base, shareholders’ funds, and consequently, a 150% growth in dividend payment.
Under the Tony Elumelu-led board, Transcorp pursued a consistent policy of prudence, while rewarding shareholders with a progressive dividend policy, declaring a N2bn dividend payment for 2022.
In Q1 2023, the Group recorded N32.4 billion in gross earnings, reflecting an improvement from N31bn, despite facing economic and gas challenges that affected the power business’s generation capacity. 2022 will be the 5th consecutive year of unbroken dividends payment by the group since the Elumelu led team assumed leadership of the conglomerate.
Recall that prior to the change in ownership and management in 2011, Transcorp had operated since inception without dividends to its shareholders.
Although an exchange loss recognized on foreign-denominated liabilities impacted the Group’s profitability, Transcorp maintained its revenue growth in Q1 2023. Commenting on the Q1 2023 financial highlights, Adegunwa expressed management’s optimism “about a full rebound in Q2 2023, with the increased-generated capacity from our power business and higher occupancy from our hospitality business.”
Dr. Owen Omogiafo, Group President/CEO, also highlighted Transcorp’s ESG initiatives and progress in reducing its carbon footprint, supporting local communities, and promoting diversity, equity, and inclusion.
“Transcorp is about sustainability. We will continue to execute our sustainability strategy of transforming our world to create positive environmental, social, and economic impact across our businesses and communities.
“We are optimistic, and we remain focused on our strategic objectives of fully optimizing our existing assets to ensure we consistently and sustainably deliver value for our stakeholders.”
Responding to a question from an analyst on the call, Dr. Omogiafo clarified that there are no current plans to list the company’s power business on the stock market.
Instead, the group said in a statement, that it aims to continue to focus on the exploration of OPL 281 to realize its integrated gas-to-power strategy, redefine hospitality standards in Nigeria and beyond, and increase its daily average available and generated capacity in Nigeria’s power sector.
Transcorp is also launching a world class event centre in Abuja to consolidate its hospitality business, even as it continues its expansion to major cities, including Lagos, where it is developing a 300-key 5-star hotel.