Ikeja Hotels Plc, one of Nigeria’s largest hospitality companies, has recorded a 247 percent increase in after-tax profit driven by revenue growth from higher occupancy rates and a surge in room sales.
Despite the rise in the cost of sales and administrative expenses, the company demonstrated improved cost efficiency as rise in revenue exceeds expenses, contributing to a surge in profit.
According to data from the Nigerian Exchange Group (NGX), After-tax profit rose to N7.2 billion for the year ended in December 31, 2024 from N2.1 billion in the previous year while pre-tax profit rose by 125 percent to N8.5 billion from N3.8 billion.
However, this growth occurred alongside an increase in revenue, which rose by 69 percent to N18.8 billion from N11.1 billion the previous year. The room sales segment remains the dominant revenue driver, contributing 65 percent to N12.8 billion of the total earnings.
The principal business of Ikeja Hotel Plc is the provision of services in the hospitality industry, including the development of other tourist facilities. It has continually expanded its participation in Nigeria’s hospitality industry through the development and acquisition of hotel and tourist facilities.
Today, Ikeja Hotel boasts of direct ownership and control of three of Nigeria’s leading five-star hotels, namely, Sheraton Lagos Hotel, Sheraton Abuja Hotel, and Federal Palace Hotels & Casino.
Read also: Ikeja Hotels rakes in N18.8bn in 2024 on rising demand
Notably, its Hotel business maintained a higher profit margin of 87 percent compared to other revenue streams, making it a key pillar of the company’s financial strength.
Operational efficiency improved, with higher gross and operating profit margins, despite increased sales, marketing, and administrative expenses.
At the end of 2024, gross profit rose by 83 percent to N7.6 billion from N4.1 billion while operating profit grew by 127 percent to N8.4 billion from N4.5 billion.
Sales and marketing expenses rose by 77 percent to N712.6 million from N4402.6 million while administrative expenses grew to N1.8 billion from N1.5 billion.
On the company’s full-year financial statement, the company saw significant asset growth and a stronger liquidity position, indicating improved financial stability.
Ikeja Hotels saw total asset surge by 40 percent to N83.7 billion from N59.8 billion while total liabilities rose by 47 percent to N53.1 billion from N36.2 billion.
However, the 493 percent increase in retained earnings to N14.3 billion suggests that the company reinvested a significant portion of its profits, strengthening its capital base as earnings per share stood at N3.33 year-on-year.
