Recently at the Nigerian Stock Exchange (NSE) Transnational Corporation of Nigeria plc (“Transcorp”) released its unaudited financial results for half-year (H1) ended June 30, 2015.
The conglomerate
Transnational Corporation of Nigeria plc is a leading diversified conglomerate with focus on acquiring and managing strategic businesses that create long-term shareholder returns and socio-economic impact. Its business interests are in four strategic sectors: Power, Oil & Gas, Hospitality and Agriculture.
Incorporated on November 16, 2004 and quoted on the Nigerian Stock Exchange, Transcorp plc has shareholder-base of about 300,000 investors, the largest of which is Heirs Holdings Limited, a pan-African proprietary investment company.
Transcorp plc notable businesses include the award-winning Transcorp Hilton Hotel, Abuja; Transcorp Hotels, Calabar; Teragro Commodities Limited, operator of Teragro Benfruit Plant–Nigeria’s first-of-its-kind juice concentrate plant; Transcorp Ughelli Power Limited which acquired Ughelli Power Plc, owner of the 972MW Ughelli Power Plant and Transcorp Energy Limited, operator of OPL 281.
The H1’15 numbers
The results show: revenue for the Group stood at N20.25billion which represents a slight drop of 5% from Q2 2014 results of N21.21billion.
However, the Company’s revenue increased by 63% to N1.58billion from N970million recorded in the corresponding period of 2014. Group profit before tax (PBT) for the H1’15 period of N5.16billion represents 36% decline on PBT of N8.02billion achieved for Q2 2014.
The Company reversed the Loss Before Tax of N489.24million in 2014 to a Profit Before Tax of N1.13billion in June 2015. Group Profit After Tax (PAT) declined by 38% from N6.89billion in Q2 2014 to N4.28billion for period under review. The PAT for the Company improved from a loss of N586.24million in 2014 to N974.48million. Total assets for the Group grew by 4% from N170.76billion for full year 2014 to N177.02billion for the second quarter ended 30 June 2015.
Reaction on H1’15 results
While commenting on the H1’15 results of Transcorp plc, Emmanuel N. Nnorom, president and chief executive officer, Transcorp plc said “Our half year results reiterate our commitment to maximizing shareholder value and delivering superior returns to all stakeholders. We had challenges in gas availability for our Power business and national grid instability. Our hospitality business recorded a strong growth with significant post-election occupancy numbers, which is impressive.”
“The future excites us as we structure a strong footing for impressive growth in the coming months,” Nnorom said.
Analysts at Renaissance Capital (RenCap) recently gave a ‘buy’ rating for Transcorp plc shares with a target price of N5.7 against current price of N2.1. RenCap are bullish and still think that Transcorp net profit will grow three times year-on-year (YoY) for the full 2015.
Analysts at RenCap had predicted that Transcorp plc would more than quintuple its profitability by 2017 in part because of the outlook for Transcorp Ughelli Power Limited (TUPL).
According to RenCap, “We believe the government’s determination to make centralised electricity supply a reliable source of power for the economy, at half the price of the currently widely used diesel generators, is sufficient reason to see a bright future for the asset.”
Strategic expansion
Earlier in the second-quarter (Q2) of 2015, Teragro Commodities Limited, the agribusiness subsidiary of Transnational Corporation of Nigeria plc signed a memorandum of understanding (MOU) with the Benue State government to lease land to establish citrus farms in Ushongo, Benue.
The MOU represents an expansion of Teragro’s current operations in Benue State, which have previously been focused in Makurdi. Teragro has been functioning as an industrial operation processing oranges and mangoes into concentrates for local consumption. Over time, Teragro has grown and expanded its footprint and now produces concentrate that meets the most rigorous global standards for purchase by multinational corporations, including a leading international beverage manufacturer.
Also, Transcorp’s diversification strategy is still on course with the development of the new hotels in Lagos and Port Harcourt and increase in generating capacity to 850MW at its Ughelli Power Plant in Delta State by the end of the year.
Transcorp agribusiness subsidiary Teragro recorded a significant milestone as it has recently installed a juice cup extractor to ensure world class production of quality products for its customers.
Its agribusiness subsidiary Teragro Commodities Limited acquired and installed extraction cup technology, instantly enabling the company to deliver superior quality juice concentrates that meet international quality standards.
“The extraction cup revolutionises our production process and ensures that concentrates we produce will pass even the most stringent international standards,” Teragro CEO Dupe Olusola said. “This investment elevates us to the top of local concentrate producers and ensures that Teragro is able to compete with any international concentrate producer from Spain, Israel, the United States and more.”
Teragro processes orange and pineapple concentrates, mango purées and orange-peel oil for industrial markets in a 26,500mn TPA capacity plant called Teragro Benfruit in Benue State. In addition to meeting required international quality standards with zero peel oil, the new technology increases the capacity of Benfruit Plant and joins a long line of Teragro’s industry standard-setting certifications — from FSC 2200 to iSo.
Speaking on the importance of the investment for Teragro, Nnorom said “We have received positive commendation from our biggest customers. The acquisition represents a clear commitment to meeting their requirements and ensuring that the country’s largest beverage manufacturers have local suppliers with the highest quality products on offer.”
The hospitality subsidiary
In the review H1’15, Transcorp Hilton Abuja was honoured with an unprecedented five awards by the voters of the 22nd World Travel Awards.
The hotel, which is owned by Transcorp Hotels plc, the hospitality subsidiary of Transnational Corporation of Nigeria plc, emerged winner of the prestigious World Travel Awards for Africa’s Leading Business Hotel, Nigeria’s Leading Business Hotel, Nigeria’s Leading Hotel, Nigeria’s Leading MICE Hotel and Nigeria’s Leading Hotel Suite (the Presidential Suite) at the Africa and Indian Ocean Gala Ceremony 2015 which took place at the Kempinski Seychelles Resort in Baie Lazare, Seychelles.
Valentine Ozigbo, MD/CEO of Transcorp Hotels plc, said “Receiving these awards ahead of the planned upgrade of an already award-winning facility means that we are poised to deliver an unparalleled experience on the continent of Africa; incredible things are coming both for our guests and for industry watchers.”
World Travel Awards exists to recognize, acknowledge and celebrate excellence in travel tourism and hospitality, which is why Transcorp Hilton Abuja was chosen by fellow professionals across the globe for a World Travel Award. Winners of the World Travel Awards are decided on by an independent vote from 167,000 travel agents and tourism experts in over 200 countries. The awards cover twenty-three countries ranging across the Indian Ocean to the Pacific.
Power, Oil & Gas subsidiary
Transcorp Ughelli Power Limited (TUPL), the power generation and investment subsidiary of Nigerian conglomerate Transcorp plc recently released its 2014 Annual Report and held its 2nd Annual General Meeting of shareholders. The Report details outstanding progress during the first full calendar year of operations at Ughelli Power Plant, the Group’s power generating asset and Nigeria’s largest gas-powered generating company.
Tony O. Elumelu, board chairman Transcorp plc had predicted long-term mega-growth for Transcorp Ughelli Power Limited, saying, “We are determined to produce a quarter of all power generated in Nigeria and we are clearly on track to achieve this, thanks to the cohesiveness of the leadership team and the hard work of the staff, driven by the TUPL CEO.” “2015 will see the execution of expansion plans through key acquisitions, as well as a Greenfield project set to begin operations in 2018.”
Adeoye Fadeyibi, CEO of Transcorp Ughelli Power Limited (TUPL) who outlined the company’s short term, post-acquisition operational strategy — one based largely around the recovery of installed capacity, noted that in 2014, TUPL increased generation capacity from 342MW at December 2013, to 610MW at the end of 2014 — a 78% increase year-over-year and a 300% increase from takeover.
Iheanyi Nwachukwu
