Transcorp multiplies profit more than eight times to N6.5b in H1

Transcorp multiplies profit more than eight times to N6.5b in H1

Transnational Corporation of Nigeria Plc (Transcorp) multiplied after tax profit more than eight times year-on-year to close the half year operations at N6.5 billion. The conglomerate experienced a further upswing in earnings performance in the second quarter when it generated N4.5 billion or 69 percent of the closing profit figure for the half year in June 2021.

Already the high hopes for a turnaround the company raised with first quarter results have been realised at half year. The closing profit figure for the six months of the 2021 financial year represents 171 percent of the company’s 2020 full year profit of N3.8 billion.

Group profit had dropped from the region of N21 billion in 2018 and the first significant recovery is being recorded this year. The results so far indicate that Transcorp has overcome its challenges and that one of the biggest profit numbers in the company’s records can be expected in the 2021 financial year.

Also, the new momentum in revenue generation seen in the first quarter was sustained in the second. The company is experiencing an upswing from loss of revenue for the second year in 2020 – when it closed with the lowest turnover figure in four years.

The increased profit delivery in the second quarter follows a strong growth in revenue against a general moderation of costs. The company grew turnover by over N9 billion or 47 percent quarter-on-quarter in the second quarter, well ahead of a 29 percent increase in cost of sales.

Other cost elements slowed down generally relative to revenue, which jerked up profit margin from 3.6 percent in the same quarter last year to 15.5 percent in the second quarter.

The year-on-year position for Transcorp at the end of June 2021 shows that turnover grew by 52 percent or over N18 billion to close at more than N53 billion. A further increase in momentum expected in the second quarter has been realised and the prospects for the company beating its 2018 turnover high of N104 billion have brightened as well.

The company’s main income line – electricity generation continues to lead revenue growth so far this year. Earnings from the income line rose by 55 percent year-on-year to about N30 billion at half year. This contributed close to 56 percent of the company’s turnover at the end of June 2021.

The second largest revenue line – capacity charge also maintained a strong growth at roughly 35 percent year-on-year […]

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