Transcorp Plc has released its unaudited Q3 2024 results, reporting an impressive 352% year-on-year (YoY) growth in profit before tax (PBT) to N34.566 billion.
This strong quarterly performance brought the nine-month PBT to N105.485 billion, reflecting a 303% YoY growth, which is already 79% higher than the company’s full-year 2023 pre-tax profit.
Additionally, Transcorp recorded 166% growth in Q3 2024 revenue to N122.327 billion, up from N45.903 billion in Q3 2023. For the nine-month period, revenue climbed to N297.664 billion, representing a 133% YoY increase.
Key highlights (2024 Q3 vs 2023 Q3)
- Gross earnings: N122.237 billion +166.29% YoY
- Cost of sales: N74.864 billion +200.87% YoY
- Gross profit: N47.373 billion +125.37% YoY
- Administrative expenses: N10.959 billion +20.21% YoY
- Operating profit: N36.773 billion +187.35% YoY
- Net finance cost: N4.635 -27.87% YoY
- Profit after tax: N23.121 billion +248.50% YoY
- Earnings per share: N0.49 +435.65% YoY
- Cash and Cash equivalents: N57.245 billion +245.31%
- Total Assets: N687.758 billion +29.03%
- Total Equity: N250.594 billion +33.79%
Key Financial highlights:
Profit Surge: The substantial growth in pre-tax profit is primarily attributed to the significant increase in revenue.
A key driver of this performance was energy sent out, which contributed 58% of total revenue, with capacity charges accounting for 26%.
Altogether, the power business generated 84% of group revenue.
Expense Analysis: Despite strong revenue growth, cost pressures persisted, primarily due to higher natural gas and fuel prices.
The cost of sales rose 201% in Q3 2024, with natural gas and fuel costs for the nine-month period increasing 211.41% to N138.644 billion, representing 47% of total revenue.
- While these rising costs compressed the gross profit margin to 38.75%, a 19% decline compared to Q3 2023, the company has managed to maintain healthy profitability margins, with pre-tax profit margin increasing and remaining above 30% for the nine months of 2024.
- Balance Sheet Performance: Transcorp reported a 29% increase in total assets, rising from N530 billion in December 2023 to N684 billion in Q3 2024.
- Shareholders’ funds also grew by 34%, from N187 billion to N251 billion, driven by profit accreting to retained earnings.
- This growth has helped reduce leverage, as reflected in the 4% decline in the equity multiplier to 2.73.
Commenting on the results, Owen Omogiafo, OON, President and Group Chief Executive Officer of Transcorp Group, highlighted the company’s focus on innovation, operational excellence, and long-term investments. She stated:
“We are proud of our consistent year-on-year growth. This remarkable financial performance is a reflection, once again, of our vision and spirit of execution. As we approach the year-end, we will focus on enhancing operational efficiency, investing in high-growth sectors, and delivering long-term value to our shareholders. We are investing for the future, particularly in the energy and hospitality sectors, delivering for our shareholders and our nation.”
Her comments appear to align with the recently announced share capital reconstruction plan aimed at enhancing market performance.
- On October 28, 2024, Transcorp announced its intention to reduce the number of issued ordinary shares through a share reconstruction scheme.
- The company indicated that the reconstruction will be carried out under Sections 130-133 of the Companies and Allied Matters Act (CAMA) 2020, with final terms to be presented at the Annual General Meeting (AGM).
- Following the share capital reconstruction announcement on October 28, 2024, Transcorp’s stock surged, closing at N48.60 per share, marking a 339.8% gain from its previous close of N11.05. This surge brought the YtD gain to 461%.
- The market’s reaction reflects strong investor confidence, aligning with the President’s stated goal of delivering long-term returns while enhancing operational efficiency and expanding investments in high-growth sectors.
- As Transcorp moves forward, this positive sentiment is expected to bolster its strategic initiatives and attract further investment.
- Notably, last year, the share price delivered an impressive 666% year-to-date gain, indicating a robust track record that may further encourage investor optimism.
