Transcorp posts 18% drop in nine-month profit as revenue shrinks

Transnational Corporation Plc (Transcorp) logged a 17.9 per cent fall in net profit for the first nine months of the year as revenue and other income took a hit, while the group incurred a significant foreign exchange loss on financing activities.

A 20.6 per cent slide in income from energy sent out, the group’s biggest revenue contributor, set the stage for weaker performance and reduced turnover.

Revenue, according to the conglomerate’s newly released unaudited financial report, retreated to N357.4 billion from N412.4 billion a year earlier as the group also recorded a decline in income from its food & beverage and event centre rental businesses.

“Revenue in the period was impacted by the vandalisation of critical transmission infrastructure which constrained power evacuation to the grid as well as gas supply constraints,” Transcorp stated in the report.

“However, these are being resolved,” it added.

The conglomerate, which has tentacles in power, hospitality and energy, posted total assets of N1.13 trillion during the period, up 12.9 per cent from N1 trillion at the end of last year.

Other income fell 79.4 per cent to N493.9 million as dividend income on equity securities fell sharply, straining operating profit.

The group recorded a foreign exchange loss on financing activities of N3.1 billion, compared with a gain of N1.6 billion a year ago, and a 15.9 per cent fall in finance income, reflecting lower interest income earned.

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“Our performance reflects the strength of our diversified portfolio and our ability to sustain strong profitability and expand margins in a challenging operating environment,” Owen D. Omogiafo, Transcorp’s president and CEO, said in a separate statement.

“We continue to work closely with stakeholders to address industry-wide constraints and improve electricity delivery, while leveraging our hospitality investments to strengthen Nigeria’s position as a destination for business, tourism and major events,” she added.

Profit before tax decreased by 10.5 per cent from N124.5 billion to N111.4 billion, while profit after tax fell to N75.1 billion from N91.4 billion.

Return on equity stood at 19.4 per cent, compared to 25.9 per cent a year ago.