April 26, (THEWILL) – Transnational Corporation (Transcorp) recorded a 63 percent decline in profit after tax to N3.2 billion in the first quarter (Q1) of 2023 compared to the corresponding period in 2022.
A look at the firm’s unaudited financial statement for the period showed that the loss was driven by Nigeria’s volatile foreign exchange market and an increase in the direct cost of doing business that decelerated profit.
The conglomerate incurred N2.4 billion in foreign exchange loss on borrowings, which was almost five times more than the figure for the first quarter of last year.
Pre-tax profit shrank by half to N2.9 billion, while after-tax profit declined to N1.9 billion from N5 billion.
Transcorp is currently repaying a loan of $215 million from Africa Finance Corporation, which originally matured in December, proceeds of which went to purchasing a power plant in Ughelli, Delta State.
The facility has been restructured to expire this year and now runs at a floating interest rate of 90 days, according to its audited financial report for last year.
Cost of sales was up by 12.4 per cent at N18.2 billion, spurred by increased food & beverage expenses and natural gas costs from the corporation’s hotel and hospitality and energy subsidiaries, respectively.
Turnover for last quarter jumped 3.2 per cent to N32.4 billion on improvement in room revenue and income from food and beverage.
The group’s administrative expenses rose to N5.9 billion from N5.2 billion a year ago, driven by higher management and incentive fees and other operating expenses.
Billionaire businessman, Femi Otedola, recently acquired a 5.5 per cent in TranscorpFemi Otedola, recently acquired a 5.5 per cent in Transcorp which placed him in the rank of substantial shareholders of the firm.
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.
