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Transcorp Plc Nets N1.126b 2016 Loss, Despite N4.8b Tax Rebate

Directors of conglomerate, Transnational Corporation of Nigeria (Transcorp) Plc, on Wednesday submitted its audited result for the year ended December 31, 2016 through the Nigerian Stock Exchange (NSE), a major highlight of which is that shareholders would not have to vote for payment of dividend when they meet for the Annual General Meeting, despite the N18.67bn or 45.81% rise in revenue for the period. It is not part of the proposals to be put forward by the board at the meeting.
The company returned to a loss before and after tax, the severity of which was mitigated by the huge tax rebate of N4.801bn, as against the N1.287bn tax paid at the end of 2015.
Details of the result shows that revenue for the period rose N59.424bn from N40.753bn, with cost of sales rising from N16.423bn in 2015 to N29.258bn.
Administrative expenses rose to N10.377bn (the lion’s share of which included staff cost- N1.774bn; depreciation- N1.072bn; management incentive fees- 935.456m; professional fees- N688.828m; electricity and diesel cost- N1.129bn; and ‘others’- N1.747bn) from N9.613bn, leading to operating profit of N20.716bn, an improvement by N5.682bn or 37.79% from the previous N15.034bn
Transcorp Plc also reported finance cost (interest expense on loans) of N8.303bn, which rose from the previous year’s N6.818bn as against finance income of N363.016m, down from N1.165bn; while foreign exchange loss on borrowings of N18.703bn (which arose according to the board, from the decline in the value of the Naira against the U.S$ from N196/US$ to N304.5/US$ during the period), rising by N12.642bn or 208.57%, resulting net finance cost of N26.644bn, representing a N14.93bn or 127.45%
Loss before tax stood at N5.928bn, as against the N3.319bn profit for the 2015 financial year, just as after tax loss stood at N1.126bn, up from a profit of N2.031bn, resulting in loss per share of two kobo, compared to the previous Earnings Per Share of one kobo; while Price/Earnings Ratio was -30.13 up from 602.45; just as net profit margin stood at -1.9% from the previous 4.98%.
A breakdown of the financials shows that the bulk of revenue came from the power subsidiary, which earned N44.067bn, representing 74.15%, while the hospitality business- Transcorp Hotels contributed N15.341bn or 25.81%. The power arm also accounted for N24.885bn, the lion’s share of the N27.007bn total finance cost, followed by Transcorp Hotels with N5.239bn, while the power arm contributed N8.083bn to the group’s loss, and N6.266bn of the tax rebate.

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