Transnational Corporation of Nigeria Plc delivered an impressive financial performance in the first half of 2025, posting a record pre-tax profit of N85.697 billion.
The impressive first half year result includes N49.407 billion in Q1 and N36.290 billion in Q2.
An analysis of the financial statements shows that this impressive profit was primarily driven by revenue growth, especially from the power segment.
Revenue drivers
Transcorp reported total revenue of N279.678 billion, a 59.43% increase year-on-year, already representing 69% of the full-year 2024 revenue.
The surge was largely driven by the power segment, which grew 225% to N243.086 billion, accounting for 87% of total revenue.
The corporate center contributed N35.8 billion, up 113% YoY, almost matching the N47.5 billion from the hospitality segment, and increasing its share of group revenue to 13% from 9.57% in H1 2024.
The relatively higher growth in revenue compared to cost of sales buoyed gross profit, maintaining a healthy margin of 46.81%.
The President/Group CEO, Owen Omogiafo, OON, reassured investors of continued growth potential:
“With our new 5,000-seat capacity event centre, we are positioning Nigeria as the epicentre of high-scale conferences and events, including hosting the recently concluded AFREXIM Annual Meetings 2025.
We continuously explore innovative ways to further accelerate our growth trajectory while strengthening our leadership in Nigeria’s power, hospitality, and energy sectors.”
Profit margin pressures
Despite strong revenue growth, cost pressures impacted margins. Operating margin declined by 25% to 33%, while pre-tax margin fell by 24% to 31%, reflecting the effect of direct costs and overheads though growing at a slower pace than revenue but still compressed profitability.
Balance sheet size and health
Transcorp’s balance sheet reflects not only profit growth but also expanding financial muscle. Total assets climbed to N907 billion, a 21% increase from FY 2024.
However, this expansion came with a rise in leverage. Total borrowings increased by 25% to N110.347 billion, indicating the use of more debt to finance growth.
While this reflects expected future cash flow growth, it also places greater responsibility on efficient debt management.
Leverage rose to 3.17x from 2.8x in December 2024, yet the company’s coverage ratio of over 10x signals strong capacity to service obligations.
On the equity side, retained earnings grew 25% to N141 billion, providing a healthy buffer for both investments and shareholder returns.
Supported by this strong equity base, the company declared an interim dividend of N4.064 billion, representing 40 kobo per ordinary share, subject to applicable withholding tax, demonstrating its commitment to delivering value to shareholders.
This growth reinforces shareholders’ value and signals that the company is strengthening its internal reserves alongside asset expansion.
In essence, Transcorp’s balance sheet shows a healthy growth trajectory with expanding assets supported by rising retained earnings and borrowings that remain within a manageable proportion of the company’s financial structure.
However, a closer look reveals some cautionary points.
- Trade and other receivables account for a sizeable portion of assets, tying up nearly half of the balance sheet in amounts not yet converted to cash.
- This is compounded by a negative operating cash flow of N22.6 billion in H1 2025, a reversal from the positive N7.543 billion in H1 2024.
Buy, Hold or Sell
Despite the moderation in short-term profit growth to 21%, the company’s long-term trajectory, evidenced by a remarkable 5-year CAGR of 143%, demonstrates its resilience and capacity for sustained value creation.
Its leadership in the conglomerates sector, underpinned by the highest market capitalization at N488 billion, reinforces its dominance and credibility.
Trading at an earnings multiple of 8.16x slightly above the sector average of 7x Transcorp is still attractively priced relative to its growth prospects and earnings power.
Furthermore, profitability momentum, strong retained earnings, and dividend payout capacity highlight the company’s ability to balance growth with shareholder returns.
The August 22, 2025, broker compendium shows a consensus “Buy” rating from leading houses such as Bancorp Securities, Meristem, Lead Capital, and CardinalStone.
Overall, the weight of evidence clearly supports accumulation for medium- to long-term investors seeking exposure to a resilient and fundamentally sound conglomerate.
Verdict – Buy
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