Transcorp's Profit Drops by 18% in Nine Months Due to Revenue Losses

Transnational Corporation Plc (Transcorp) reported an 18% drop in net profit for the first nine months of the year. This decline came as revenue and other income fell sharply, and the company faced a huge foreign exchange loss on its financing activities.

A 20.6% decrease in income from energy, which is the largest source of revenue for the group, set the tone for the poor performance and lower earnings.

According to the company's latest unaudited financial report, revenue fell to N357.4 billion from N412.4 billion last year. The group also saw a reduction in income from its food and beverage as well as 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 said in the report.

"However, these are being resolved," it added.

Transcorp, which operates in power, hospitality, and energy sectors, reported total assets of N1.13 trillion during this period. This is a 12.9% increase from N1 trillion at the end of last year.

Other income dropped by 79.4% to N493.9 million. This decline was mainly due to a sharp fall in dividend income from equity securities, which affected operating profit.

The group also recorded a foreign exchange loss of N3.1 billion on financing activities. This is a stark contrast to a gain of N1.6 billion last year, along with a 15.9% decrease in finance income due to lower interest income earned.

“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, the President and CEO of Transcorp, said in a separate statement.

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

Profit before tax fell by 10.5% from N124.5 billion to N111.4 billion. Profit after tax also dropped to N75.1 billion from N91.4 billion.

Return on equity was 19.4%, compared to 25.9% a year ago.