vLagos, Nigeria – Transcorp Plc has announced its unaudited Q3 2024 results, showcasing a striking 352% year-on-year (YoY) growth in profit before tax (PBT), reaching N34.566 billion. This impressive quarterly performance has propelled the nine-month PBT to N105.485 billion, reflecting a staggering 303% YoY increase and already surpassing the company’s total PBT for the entire year of 2023 by 79%.
Key Financial Highlights (Q3 2024 vs. Q3 2023)
- Gross Earnings: N122.327 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 billion (-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%)
Performance Analysis
Revenue Growth: The robust growth in PBT is primarily attributed to a significant rise in revenue, which soared by 166% in Q3 2024 compared to the same quarter last year. Energy sales played a crucial role, contributing 58% of total revenue, with capacity charges accounting for 26%. The power segment was pivotal, generating 84% of the group’s overall revenue.
Cost Pressures: Despite the impressive revenue growth, the company faced rising costs due to increased natural gas and fuel prices. The cost of sales surged by 201% in Q3, with natural gas and fuel costs for the nine-month period rising 211.41% to N138.644 billion, which constituted 47% of total revenue. This led to a compression in the gross profit margin to 38.75%, a decline of 19% from Q3 2023. Nevertheless, the pre-tax profit margin remained above 30% for the first nine months of 2024.
Balance Sheet Strength
Transcorp’s balance sheet shows significant strength, with total assets increasing by 29% from N530 billion in December 2023 to N684 billion by Q3 2024. Shareholders’ equity grew by 34% to N251 billion, supported by retained earnings. This growth reduced leverage, evidenced by a 4% decline in the equity multiplier to 2.73.
Management Insights
Owen Omogiafo, OON, President and Group CEO of Transcorp Group, emphasized the company’s commitment to operational excellence and long-term investments. She stated, “We are proud of our consistent year-on-year growth. This remarkable financial performance reflects our vision and spirit of execution.” Omogiafo highlighted plans for enhancing operational efficiency and investing in high-growth sectors.
Share Capital Reconstruction Announcement
On October 28, 2024, Transcorp announced a share capital reconstruction plan, aiming to optimize its market performance by reducing the number of issued ordinary shares. This plan will be executed under Sections 130-133 of the Companies and Allied Matters Act (CAMA) 2020, with details to be presented at the upcoming Annual General Meeting (AGM).
Following this announcement, Transcorp’s stock surged to N48.60 per share, a remarkable 339.8% increase from its previous close of N11.05, bringing the year-to-date gain to an impressive 461%. The market’s reaction indicates strong investor confidence, aligning with the company’s goals of delivering long-term returns and enhancing operational efficiency.
Conclusion
Transcorp Plc’s outstanding Q3 performance reflects its strategic focus on growth and efficiency amidst challenging market conditions. With robust financial results, a solid balance sheet, and positive market sentiment following the share reconstruction announcement, Transcorp is well-positioned for continued success and investment attraction as it moves toward year-end.