It was not a very wonderful beginning of the year 2019 for Transnational Corporation of Nigeria (Transcorp), judging by its unaudited performance score-card for the first quarter ended March 31, as revenue declined, while operating costs ballooned, particularly its power generating segment in the period.
Specifically, revenue for the period declined by N7.99bn or 30.4%, while cost of sales dropped N4.16bn or 29.04%; even as net profit fell by N3.318bn or 61.34% in the period under review.
Specifically, Transcorp reported N18.306bn revenue, compared to N26.302bn in 2018Q1, the lion’s share of which was the N14.119bn from the power subsidiary compared to N22.485bn in 2018. It was followed by N4.186bn from hospitality, representing an improvement over the N3.816bn in the corresponding period of last year. The corporate centre, however, contributed N924.968m, a drop from N2.436bn in 2018.
A further breakdown of the revenue showed that energy sent out by Transcorp Generating Company contributed N9.117bn, down from N14.519bn; capacity charge dropped from N7.922bn to N4.963bn; just as rooms charge from Transcorp Hotels rose marginally from N2.457bn to N2.57bn; while shop rental by the same business segment rose to N1.234bn from N1.047bn.
Cost of sales fell from N14.323bn to N10.163bn, driven by the N7.691bn natural gas and fuel costs, which dropped from N11.987bn in the 2018Q1; followed by staff costs of N1.008bn, which increased from N945.982m. Gross profit, therefore, slipped from N11.979bn to N8.142bn representing a drop by N3.837bn or 32.03%.
Administrative expenses dropped slightly from N3.572bn in 2018Q1 to N3.079bn; other income also reduced to N55.931m from N57.725m; while other gains (net) was N34.167m, compared to a loss of N4.676m in prior Q1. Operating profit, therefore, came to N5.153bn, down by N3.307bn or 39.09% from N8.459bn to N5.153bn.
Finance costs, being interest expense on loans rose to N3.334bn from N2.452bn; while interest on loan increased to N455.883m from N212.161m; resulting in net finance cost rose to N2.878bn from N2.239bn; just as foreign exchange gain on financing activities stood at N277.829m, compared to a loss of N284.416m.
Profit before tax for the period declined from N5.935bn from N2.552bn, representing N3.382bn or drop by 56.99%. Income tax expense dropped to N460.758m from N524.319m in 2018; bringing net profit to N2.091bn from N5.41bn, a drop by N3.318bn or 61.34%. Meanwhile, the power generation business accounted for N2.866bn of PBT, as against N6.112bn in the preceding Q1; while N458.401m came from the hospitality segment, up from N874.276m; and N152.81m from corporate centre, compared to N1.393bn.

Earnings Per Share stood at 1.58 kobo, from 5.55 kobo.

PAT=-3.318bn=61.34%