Transcorp Power reports N52.76 billion pre-tax profit in 2023

Transcorp Power Plc (Formerly Transcorp Power Limited) has reported a pre-tax profit of N52.76 billion for the year ended 31 December 2023, marking an impressive 84.4% YoY increase.   

According to the company’s annual reports and accounts, Transcorp Power reported revenue of N142.122 billion, representing a 57% increase from the N90.349 billion reported the year prior. 

Approximately 67% of this revenue stemmed from energy delivered, and 33% attributed to capacity charges.   

Key highlights (2023 vs 2022 FY)

• Revenue: N142.122 billion +57.30% YoY
• Cost of sales: N66.700 billion +38.53% YoY
• Gross profit: N75.422 billion +78.72% YoY
• Impairment loss on financial assets: N2.732 billion +236% YoY
• Admin expenses: N8.663 billion +51.74% YoY
• Operating profit: N64.625 billion +80.17% YoY
• Finance cost: N7.694 billion +75.67% YoY
• Foreign exchange loss: N7.177 billion +73.76% YoY
• Profit after tax: N30.234 billion +74.93% YoY
• Earnings per share: N92.25 -57.75% YoY

  

Since its listing by introduction on March 4, 2024, Transcorp Power has experienced a notable 42.8% YtD increase in its share price, leading to a market capitalization of N2.83 trillion and ranking it 18th on the NGX in terms of year-to-date performance.   

 

Key highlights of the result

• Profit surge: The impressive surge in pre-tax profit can be attributed to the significant growth in revenue outpacing the rise in the cost of sales, consequently yielding a strong gross profit margin of 53%.

• Expense Analysis: Despite the slower growth in the cost of sales compared to revenue, there is a persistent increase in natural gas and fuel costs, which has been a primary driver behind the overall rise in the cost of sales, constituting 84% of the total cost of sales.

Additionally, impairment losses on financial assets, administrative expenses, and foreign exchange losses remain elevated. If not managed effectively, these factors have the potential to negatively impact the company’s bottom line in subsequent periods. 

• Balance Sheet: The healthy increase in total assets, growing by 33% YoY to reach N223.391 billion, is noteworthy.

Furthermore, the growth in total assets, particularly the increase in cash and cash equivalents, has positively influenced the company’s net debt, which decreased by 23.35% to N30.944 billion from N40.370 billion in 2022.  

This improvement has also impacted the company’s gearing ratio, which declined to 35% from 51% in 2022. 

Overall, there is a notable increase in return on equity (52%), despite the rise in shareholders’ funds.