The board of Transnational Corporation of Nigeria Plc, on Friday presented its audited financials for the year ended December 31, 2018, showing that profit significantly outgrew revenue, amidst constrained costs, following which the directors recommended three kobo per share from Earnings Per Share of 23 kobo, for which we await market reactions when trading opens on Monday, February 18, 2019.
Investors and traders will also react next week, generally, to the decision the Independent National Electoral Commission (INEC) to postpone the Presidential and National Assembly polls on election-day, after four years of planning, citing logistic challenges.
It is expected that the management of Transcorp Plc will explain and seek to justify the decision to pay three kobo as final dividend, at a time its subsidiary company- Transcorp Hotels Plc is offering 20 kobo per share (READ HERE).
Qualification date for the dividend is close of business on February 28, 2019, following which register of shareholders will be closed from March 1 to 5, 2019 and paid electronically on March 19, 2019.
Also noteworthy is the attention drawn by the group’s external auditors –Ernst & Young to “a material goodwill balance of N30.934bn, which principally relate to the acquisitions of Transcorp Hotels Calabar Limited (THC), Transcorp Hotels Plc (THP) and Transcorp Power Limited (TPL).”
Goodwill, EY explained, is the difference between the purchase consideration for the interest in all three companies and the group’s share of net assets acquired and then allocated to the trio, being cash generating units. It was however noted also that the group was tested for impairment “and no impairment charge has been recorded against these balances in the current financial year.”
Total revenue for the period under review rose by N23.877bn or 29.74% from N80.284bn in the 2017 financial year to N104.162bn; the lion’s share of which was the N86.737bn income from electric energy and capacity sold by Transcorp Power Ltd, up from N66.441bn in 2017. Transcorp Hotels Plc followed with a total of N17.424bn, as against the N13.843bn earned in prior year; while the corporate centre, N8.899bn, compared to N5.121bn
Cost of sales rose to N55.91bn from N43.86bn, representing N12.049bn or 27.47%. Gross profit for the period therefore increased N11.828bn or 32.47% from N36.86bn to N55.91bn.
Other operating income at N997.196m suffered a decline by N362.443m or 26.65% from N1.359bn in 2017 to N997.196m; administrative expenses rose by N2.848bn or 24.24% from N11.751bn to N14.6bn; resulting in operating profit of N34.649bn, as against the previous N26.031bn, representing an N8.617bn or 33.1% increase.
Foreign exchange loss dropped N1.386bn or 30.44% from N4.554bn to N3.167bn; following which Profit Before Tax for the year soared by N10.096bn, or 82.05% from N12.309bn to N22.402bn; even as income tax expenses rose slightly from N1.775bn to N1.698bn; leaving net profit of N20.626bn, N10.019bn or 94.46% better than the N10.607bn reported in the corresponding period of 2017. Other comprehensive loss for the year, net of tax stood at N1.254bn, as against an income of N2.798bn, which brought total comprehensive income for the year, net of tax amounted to N19.371bn, up from N13.406bn, translating to EPS of 23 kobo, up from 12 kobo.