May 12, (THEWILL)- Transcorp Plc, Africa’s leading diversified conglomerate, has announced its interim results for the first quarter ending March 21, 2024, achieving a remarkable growth of 173 percent in gross earnings from N32.39 billion reported in Q1 2023 to N88.55 billion in Q1 2024.
According to the interim financial results for Q1 2024 highlighted at the Analysts and Investor Call on Thursday, May 9, by the President/GCEO, Transcorp Plc, Dr Owen D. Omogiafo, this impressive growth in gross earnings resulted in a Year-on-Year (YoY) increase of 1,501 percent in Profit Before Tax (PBT) from N2,85 billion in 2023 to N45.68 billion in 2024. Profit After Tax (PAT) also recorded significany growth of 1,832 percent from N1.85 billion to N35.92 billion in the period ended March 31, 2024.
The increase in gross earnings is majorly due to improved average daily rate (ADR) in the hospitality segment of the group during the period. The ADR improved by 59 perccent to N189.16 billion in Q1 2024, from N119.21 billion in the corresponding period of 2023.
The ADR is a metric widely used in the hospitality industry to indicate the average revenue earned for an occupied room on a given day. The metric is one of the key performance indicators (KPI) of the industry.
The hospitality industry has remained the cash-cow of the group yielding significant returns that boost the group’s earnings as the sector recovers from the challenging years of the economy due to unfavourable fiscal and monetary policies.
Transcorp Hotel Plc recorded a 72 percent gowth to N13.8 billion in Q1 2024 from N8 billion in 2023. Gross profit grew 75 percent to N9.9 billion in Q1 2024 from N5.7 billion during the corresponding period in 2023.
Similarly, the increase in earnings is attributed to the growth in patronage in the hospitality sector and the remarkable improvement in power supply.
This followed the federal government’s intervention in resolving the lingering challenge of huge debts to generating companies (GenCos) by the distribution companies (DisCos). The group also managed its operating expenses in the midst high inflationary trend.
According to Omogiafo, there was “Increased patronage in the hotel business resulting in improved occupancy rate up to 82 per cent”.
Additionally, “Transcorp Power and TransAfam Power recorded significant improvement due to an increase in power generation and sales tariff.
The cost of funds grew by 14.3 percent N3.21 billion in Q1 2023 to N3.47 billion in Q1 2024 notwithstanding the high interest rate environment suggesting efficient management of funds which also reflects in the 8.3 percent rise in total assets, from N530 billion as at December 2023 to N574 billion in Q1 2024.
Notwithstanding an increase in operating expenses from N5.90 billion in Q1 2023 to N8.24 billion in Q1 2024, cost-to-income ratio dropped significantly to 21 percent in the review quarter against 42 percent recorded in the corresponding quarter of the previous year.
Return on Average Equity (ROAE) increased by 16.01 percent in Q1 2024 against 1.18 percent in Q1 2023 underpinned by improved gross earnings, as the Group sought to deliver better shareholder returns. Return on Average Assets (ROAA) also grew significantly by 6.26 percent from 0.40 percent in the same period of the preceding year.
The results show substantial growth across all financial indicators, reinforcing its market leadership and strategic positioning.
Exuding confidence about the Group’s operations in the year, Omogiafo said, “Our Q1 2024 results demonstrates Transcorp Group’s resilience and commitment to excellence.
“Despite the challenges, we achieved growth across all major indices, focusing on operational efficiency at both our power plants, and maximizing opportunities within our hospitality business, showing our ability to adapt and succeed in changing markets. We will continue to deliver sustainable growth, operational efficiency, and value for our shareholders.
“This robust achievement is a further demonstration of the Group’s strategic focus and effective execution. Transcorp is dedicated to its transformation agenda, emphasising sustained growth and a relentless pursuit of long-term value for shareholders.”
Driven by its mission to improve lives and transform Africa, Transcorp has built a longstanding reputation for sector transformation, operational excellence, and exceptional financial performance, delivering value to its shareholders
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
