Oredola Adeola
Amid Nigeria’s ongoing challenges within the power supply landscape, Geregu Power Plc and Transcorp Power Plc have demonstrated notable financial success in the first quarter (Q1) of 2024.
Geregu Power Plc, led by Billionaire Femi Otedola, exceeded its Q1,24 projections with revenue of N50.43bn, 61.43% above forecasts, and Gross earnings of N28.41bn, a substantial 96.20% increase.
Similarly, Transcorp Power Plc, owned by Billionaire Tony Elumelu, reported a remarkable 774.85% year-on-year increase in pre-tax profit at N28.772 billion for Q1 2024, representing 55% of the total pre-tax profit for fiscal year 2023.
The two GenCos showcased their resilience and strategic prowess in Nigeria’s energy sector, demonstrating resilience and strategic management in navigating the complexities of Nigeria’s energy landscape.
GEREGU POWER PLC
Geregu Power Plc experienced growth in total assets by 22.38% to N195.77bn in Q1 2024, with total borrowings decreasing by 51.35% to N16.58bn.
Advisors Reports’ review of the financial statement showed that the company’s cash flow remained positive, although operating cash flow decreased slightly, and it maintained a strong cash balance.
Key ratios demonstrated improvement, with gross profit margin, net profit margin, return on assets (ROA), and return on equity (ROE) all showing positive growth.
Despite a decline in the price-to-earnings (PE) ratio, Geregu’s price-to-book value (PBV) increased, indicating a market perception ahead of its fundamental performance.
Geregu Plc’s Q1 2024 financial performance revealed a robust increase in revenue, profits, and assets, along with a reduction in borrowings.
The company’s revenue surged by 254.41%, reaching N50.43bn, due to a significant growth in energy sold and capacity charge by 241.41% and 277.28%, respectively.
Pre-tax and post-tax profits also experienced a substantial boost, rising by 307.82% and 307.32% to N21.90bn and N14.46bn, respectively. Geregu Plc’s total assets grew by 22.38% to N195.77bn in Q1 2024, while total borrowings decreased by 51.35% to N16.58bn.
Inventories saw a moderate increase of 12.24% to N0.55bn, and finance costs rose slightly by 36.52% to N3.14bn due to loan repayment.
However, finance income dipped by 10.66% to N2.43bn in Q1 2023. The company’s cost-of-sales also experienced a substantial increase of 203.72% to N22.02bn in Q1 2024, while retained earnings grew by 22.19% to N38.38bn due to improved net earnings.
Cash and cash equivalents rose by 13.35% to N51.88bn in Q1 2024, and earnings per share increased significantly to N5.78k from N1.42k in Q1 2023. These positive results highlight Geregu Plc’s strong financial position and strategic management in Q1 2024.
TRANSCORP POWER PLC
Transcorp’s Q1 2024 unaudited interim reports revealed a revenue of N67.862 billion, marking a substantial 222.54% year-over-year increase from the previous year’s N21.040 billion.
Approximately 67% of this revenue was attributed to energy delivered to its customers, with 33.34% coming from capacity charges.
The company’s revenue for the quarter reached N67.862 billion, representing a 222.54% year-over-year increase from the N21.040 billion reported in the same period last year.
Approximately 67% of this revenue was generated from energy delivered, while the remaining 33.34% came from capacity charges.
Key financial highlights for the quarter include a 351.80% year-over-year increase in gross profit to N34.779 billion, a 1,302.44% surge in impairment loss on financial assets to N1.089 billion, and a 382.01% increase in admin expenses to N4.280 billion.
The company’s operating profit also rose by 336.08% to N29.410 billion, while finance costs increased by 40.83% to N2.176 billion.
Transcorp Power’s profit after tax for the quarter was N20.141 billion, marking a 665.50% year-over-year increase.
However, the company’s earnings per share decreased by 91.80% to N2.69.
Advisors Report gathered that the company’s revenue growth was driven by a steep increase in income from capacity charges and energy delivered, with revenue from capacity charges growing by 215% year over year to N22.264 billion and revenue from energy delivered rising by over 225% year over year to N45.231 billion.
Out of the total revenue, Transcorp Power generated N55.429 billion from local customers and N12.442 billion from international customers.
Overall Assessment
Resilience and Strategic Prowess: Both Geregu Power Plc and Transcorp Power Plc demonstrated resilience and strategic management in Nigeria’s energy sector, showcasing notable financial success in Q1 2024.
Positive Financial Trends: The companies exhibited positive financial trends with substantial revenue growth, profit increases, and improvements in key financial indicators.
Market Perception and Fundamental Performance: Geregu’s PBV increased, indicating positive market perception, while Transcorp’s impressive profit growth showcased effective financial management.
Future Outlook: The financial performance of both companies in Q1 2024 reflects their strong positions in the energy sector and their ability to navigate challenges effectively.
