The Nation Newspaper

Tag: Transcorp

  • Transcorp Hilton set for World Economic Forum

    Transcorp Hilton set for World Economic Forum

    With a few days to go to the 24th World Economic Forum on Africa (WEF), the management of Transcorp Hilton Abuja has told The Nation that it is prepared to host a hitch-free event and provide a world class hospitality experience for all the visiting delegates.

    Mr. Valentine Ozigbo, the MD/CEO of Transnational Hotels & Tourism Services Limited (Owners of Transcorp Hilton Abuja), remarked that “all the delegates of our best efforts to ensure they have a comfortable and hassle-free experience during their stay with us. We are proud to be the first hosts of WEF in the West African sub-region and we are set to create a refreshing hospitality experience for all the WEF delegates us.”

    On the preparations for the event, Etienne Gailliez, the General Manager of the hotel, said “Transcorp Hilton Abuja has a long history of hosting large high profile international events and we are known for being leaders in our field and for delivering customer-focused service to all our guests. We will surely bring this cherished history of service excellence and experience to bear on hosting the 24th World Economic Forum on Africa.”

    In the past week, the hotel’s team of over 1000 employees has attended special WEF orientation training sessions where the peculiar demands of the event and the delegates were highlighted with a view to meeting and exceeding the expectations of the delegates.

    The accreditation process for the event started weeks ago and only duly accredited delegates to the WEF and personnel needed to manage the event would be allowed access to specific zones of the hotel.

    On security concerns in the wake of recent happenings in Abuja, the hotel’s Public Relations Manager, Mr. Shola Adeyemo, said, “the well-being, safety and security of our guests are of paramount importance and we continue to make every effort to ensure that all practises and standards are in line with strict safety and security regulations.”

    In a related development, the Minister of Finance, Dr Ngozi Okonjo-Iweala, has allayed fears of insecurity in Abuja as the country prepares to host the World Economic Forum on Africa.

    Okonjo-Iweala, spoke at the weekend following last Thursday’s Nyanya bomb explosion in Abuja.

    She told newsmen in Abuja that President Goodluck Jonathan would make a statement on the forum and security issues shortly.

    She said, “With the World Economic Forum, of course, it’s not easy; the news we have so far is that people are asking questions but it’s seems encouraging.

    “I think that by the time we hear some of the security measures that the president is going to announce, we will see that we will calm the nerves of those who are proposing to come.

    “We have also sent a press advisory but we should focus now on the feelings. I told you that I was sad about the abducted girls and we should focus on what to do to bring the girls back.

    “And, we should also focus on families of those who lost their lives; that is very important.

    “It is not that the forum is not important but more important is the issues of the girls and supporting the families which have lost people.

    “We will see what will happen with the forum; I am confident that things will be okay but our minds are not in it right now as on the issues of those who lost their lives and their families.”

  • Transcorp grows net profit by 278% in Q1

    Transcorp grows net profit by 278% in Q1

    Transnational Corporation of Nigeria (Transcorp) Plc grew its top-line and bottom-line significantly in the first quarter with net profit after tax rising by 278 per cent to N3.15 billion.

    Key extracts of the three-month report of the conglomerate for the period ended March 31, 2014 showed that profit after tax rose from N833.7 million in first quarter of 2013 to N3.15 billion in first quarter of 2014. Profit before tax increased from N1.31 billion to N3.77 billion.

    The report indicated that turnover rose to N10.54 billion in 2014 as against N3.55 billion recorded in comparable period of 2013. Gross profit stood at N7.69 billion compared with N2.76 billion while operating profit increased from N1.43 billion to N4.67 billion.

    The company has distributed N1.9 billion as its first ever cash dividends to shareholders following a double in profit to N9 billion during the year ended December 31, 2013.

    Extracts of the audited reports showed that turnover rose to N18.8 billion in 2013 as against N13.2 billion recorded in 2012. Profits before tax rose from N3.9 billion in 2012 to N9.0 billion in 2013.

    President and Group Chief Executive officer, Transnational Corporation of Nigeria (Transcorp) Plc, Mr. Obinna Ufudo, has said the company will be targeting group profit of about N25 billion this year.

    According to him, this business year promises to be another very bright year as the conglomerate is on the track to deliver on all its objectives.

    “Our key target is to grow group profits to over N25 billion during the year. We intend to achieve this by the continued diversification and deepening of our existing businesses. In our power business, we will focus on concluding the rehabilitation of a number of identified turbines in order to improve generating output at the Ughelli plant to 700 megawatts,” Ufudo said.

    He said the full year audited accounts reflect the conglomerate’s commitment to its long term strategic plan, which should translate into strong and sustainable growth.

    “We are excited about the achievements we recorded across our businesses within the past year. Our entry into the power sector has been a significant driver and we are already running ahead of our 2014 estimates. We expect significantly better results this year, as our diversification and growth strategies continue to gain momentum,” Ufudo said.

    At the Annual General Meeting of the company, chairman, Transnational Corporation of Nigeria (Transcorp), Mr. Tony Elumelu, assured shareholders that the conglomerate used the 2013 business year to solidify its transformation noting that the very strong financial and operating results in the year were evidences of the success of the transformation.

    According to him, the company’s results have begun to show the benefits of the discipline execution of strategy while shareholders have begun to see their rewards.

    Elumelu noted that the principal cause of asset growth for the group and company was its acquisition of the Ughelli Power Plant, Nigeria’s largest generating facility and where its influence has already seen a doubling of capacity.

    “I believe that we will build on the solid foundation laid over the last couple of years to begin an era of steady and increasing dividend payment to our shareholders,” Elumelu said.

  • Transcorp: A new dawn

    Transcorp: A new dawn

    Transnational Corporation of Nigeria (Transcorp) Plc is breaking new ground with its first-ever dividend payment. With 42 per cent growth in turnover and 129 per cent growth in pre-tax profit, the latest audited report and accounts appears to signal a new threshold for the conglomerate. Coming on the heels of the group’s new investments in power and hotel, Capital Market Editor, Taofik Salako, reports that Transcorp appears to be gaining momentum in operations and investors’ confidence

    Transnational Corporation of Nigeria (Transcorp) Plc was one of the most active stocks at the stock market last week. With about 11 per cent of aggregate turnover, transactions on the conglomerate underlined the upbeat interplay of demand and supply for its shares. The momentum at the stock market was spurred by the announcement of the conglomerate’s audited report and accounts for the year ended December 31, 2013, including its first-ever dividend recommendation.

    Last year marked a new phase for Transcorp, fundamentally and technically. With a full-year capital appreciation of 314.29 per cent in 2013, its share price trend at the Nigerian Stock Exchange (NSE) underscored the optimism as the conglomerate moved from one growth initiative to another. These initiatives, many analysts had posited, should reflect positively on the fundamentals of the conglomerate. The audited report appears to justify the bullishness.

    Both profit and loss accounts and balance sheet showed a stronger, more efficient and profitable group with almost a double in average profit on each unit of transaction. Turnover rose by 42 per cent to N18.8 billion in 2013 as against N13.2 billion recorded in 2012. Gross profit also grew by 47 per cent from N9.77 billion to N14.37 billion. After operating deducting expenses, operating profit jumped by 172.6 per cent to N10.25 billion in 2013 as against N3.76 billion in 2012. Profit before tax doubled by 129 per cent from N3.95 billion to N9.03 billion. After taxes, net profit for 2013 rose by 175 per cent to N6.96 billion compared with N2.53 billion in 2012.

    Underlying fundamental indices showed a generally positive outlook. Gross profit margin had increased from about 74 per cent in 2012 to 76.3 per cent in 2013. Operating profit margin almost doubled at 54.4 per cent in 2013 as against 28.4 per cent in 2012. Profit before tax margin, which is globally regarded as a main index for profitability, leapt from 29.8 per cent in 2012 to 47.96 per cent in 2013.

    Total assets expanded to N149.46 billion in 2013 compared with N99.56 billion in 2012. Shareholders’ funds also leapt from N64.1 billion to N86.7 billion. Total liabilities stood at N62.79 billion as against N35.46 billion.

    With the empathic top-down profitability, the board of directors of Transcorp has recommended distribution of N1.9 billion as cash dividends to shareholders, the first time the conglomerate will be making such payment since incorporation. The breakdown of the dividend recommendation showed that shareholders would receive a dividend per share of 5.0 kobo. The dividend will be paid on Tuesday, April 1, 2014 to all shareholders in the book of the conglomerate as at Friday, March 7, this year.

    Most analysts have commended the performance of the conglomerate. Renaissance Capital said the numbers were impressive and encouraging, waging a stake that Transcorp’s current market consideration is an understatement of its potential. Vice president, Africa equity sales, equities / African equity product distribution, Renaissance Capital, Akinbamidele Akintola said the performance of Transcorp reflected the additional power business acquired in 2013, which would further impact the overall performance going forward.

    “We find the numbers very impressive. We are pleasantly surprised that Transcorp decided to pay dividend for the first time at all, especially as they are entering into a growth period. We are optimistic that there would be a dramatic change in their numbers going into 2014 as the transformation process continues,” Akintola stated.

     

    Building the power base

    Transcorp’s 2013 results included early gains from the acquisition of the Ughelli Power Plant in 2013. Transcorp, through its subsidiary, Transcorp Ugheli Power Limited (TUPL), had in 2013 acquired Ughelli Power Plant for $300 million from the Federal Government of Nigeria. With installed capacity of 972 megawatts, current generating capacity of 360 megawatts and potential output of 1070 megawatts, the Ugheli power plant thickened the basket of the conglomerate’s businesses in strategic sectors including Transcorp Hilton Hotel, Abuja; Transcorp Hotels, Calabar; Teragro Commodities Limited and Transcorp Energy Limited, operator of OPL 281. Power, upstream oil, hospitality and agriculture; the combination of businesses and sectors makes for a robust outlook, given the synergies in these fastest growing and dominant sectors of the Nigerian economy. Often cited in relation to the boom in the telecommunications sector, most analysts perceive the power firms as cash cows that would not only generate power but significant returns for investors. The monopolistic nature of the system and centrality of the success of the privatization to government’s transformation agenda confer enormous advantages on the power companies.

    Transcorp Ughelli Power Ltd (TUPL) early this year signed a capacity-expansion agreement with General Electric to expand the Ughelli power plant by 1000 megawatts over the next three to five years. Transcorp and GE also signed a separate agreement to rehabilitate the damaged GT 15 turbine at the Ughelli plant, which will add 115 megawatts to the plant’s output. Currently, the Transcorp Ughelli power plant generates 360 megawatts, up from 160 megawatts on November 1, 2013 when Transcorp took ownership of the plant. With the additional 115 megawatts, as well as other rehabilitation works planned at the plant, the company projects that output at Ughelli will increase to 700 megawatts by December 2014. The Ughelli power plant is Nigeria’s largest gas-fired electricity generation asset.

    Both Transcorp and GE believed the partnership would drive new momentum in the power industry. Chairman, Transnational Corporation of Nigeria (Transcorp), Mr. Tony Elumelu and Global Chairman, General Electric, Jeffrey Immelt, who signed the agreements were enthusiastic about the potential of the conglomerate. Elumelu noted that GE would bring its proven global leadership in power technology development to bear on the Ughelli plant expansion project.

    “With this, we’ve taken a bold step in fulfilling our promise to Transcorp’s stakeholders and the people of Nigeria. In a very short period of time, we have achieved significant impact – power production has more than doubled, and with this agreement, we will see increased output before the end of this year. We are confident that this partnership with GE will further accelerate the achievement of our goals in the power sector,” Elumelu said.

    Immelt affirmed the readiness of GE to support Nigeria’s power development programme. “GE fully appreciates the confidence expressed by Transcorp. We are happy to bring the considerable resources of GE to support Transcorp’s audacious vision for Nigeria’s Power industry. This partnership with Transcorp underlines GE’s deep commitment to developing the Nigerian power sector,” Immelt said.

     

    More luxury

    The Ughelli power plant agreement came on the back similar deal by the conglomerate with Hilton Worldwide to build a new premier hotel in the up-market suburb of Ikoyi, Lagos. The proposed Transcorp Hilton Lagos, a full service, 350-room hotel on Glover Road, Ikoyi, will be the Hilton Group’s second hotel in Nigeria by Transcorp, following the award-winning Transcorp Hilton Hotel Abuja, which is one of the leaders in Hilton’s global network. The new hotel will be jointly owned by Transnational Hotels and Tourism Services Ltd, the hospitality subsidiary of Transcorp and Heirs Holdings.

    Elumelu outlined that the Ikoyi development, along with the extensive refurbishment and upgrade of the group’s existing hotels in Calabar and Abuja, demonstrated the group’s commitment to driving growth in real estate and hospitality, a strategic sector for Nigeria’s economic development.

    According to him, the new Transcorp Hilton Lagos will not only present an additional world-class venue for the increasing numbers of investors, businessmen and tourists to Nigeria, but is creating much-needed jobs for citizens, enabling their social and economic development.

    Managing Director, Transnational Hotels and Tourism Services Limited, Valentine Ozigbo said the Transcorp Hilton Lagos will grant the many Hilton Honors customers their desire to see a world-class establishment under their preferred brand in the Lagos. He said the hotel will boast of full conference facilities, meeting rooms, gym and spa, and a swimming pool in an iconic design that will certainly add verve to the Lagos landscape.

    Besides, Transcorp has recently undertaken several strategic initiatives to enable stable growth. Last year, it raised N12.91 billion through a rights issue of 12.91 billion ordinary shares of 50 kobo each at N1 per share. The net proceeds of the rights issue estimated at N12.52 billion was scheduled mainly to refinance the loan taken to acquire the Ugheli power plant. About 79 per cent of the net proceeds amounting to N9.84 billion would be used to refinance Ugheli Power. The conglomerate would use N1.63 billion, 13 per cent of net proceeds, for exploration and development of its oil block, Oil Prospecting Licence (OPL) 281. It had revised the terms of partnership in the OPL 281 to fully take responsibility for the operation of the block in its bid to become a leading Nigerian indigenous oil and gas upstream company with production. The balance of N1.05 billion, representing 8.0 per cent of net proceeds, would be used to develop new hotels Port Harcourt and Lagos; in order to boost the conglomerate’s hospitality business in the South-South and South-West of Nigeria.

     

    Looking forward

    Directors of Transcorp are confident the conglomerate has built a strong foundation to sustain its upwardly performance. President and Group Chief Executive Officer, Transnational Corporation of Nigeria (Transcorp) Plc, Mr. Obinna Ufudo said the 2013 performance reflected the conglomerate’s commitment to its long term strategic plan of strong and sustainable growth.

    “We are excited about the achievements we recorded across our businesses within the past year. Our entry into the power sector has been a significant driver and we are already running ahead of our 2014 estimates. We expect significantly better results this year, as our diversification and growth strategies continue to gain momentum,” Ufudo said.

    According to him, the strong balance sheet, substantial liquidity, diversified earnings and robust cash flow and the returns to shareholders are consistent with the group’s priorities and they are important signals of its confidence in the growth plans for a continuing profitable future.

    “We expect significantly better results this year as our diversification and growth strategies take firmer roots,” Ufudo said, raising the stakes for the year.

    Already hailed as a turnaround manager by several shareholders, Elumelu, whose Heirs Holdings became strategic shareholder in Transcorp last year, said it was pleasing to be recommending a dividend to shareholders for the first time in the company’s history. The modest dividend, according to him, is the beginning of a very bright future for all the patient and loyal shareholders.

    “With the tremendous progress we have already recorded in our power business – taking the Ughelli plant’s power output from 160mw when we took over on November 1, 2013 to 360mw within three months, 2014 promises to be a very rewarding year for the company and our 300,000 shareholders,” Elumelu said.

    While its troubled past may linger and continue to moderate immediate share consideration, the fundamental outlook and ongoing initiatives suggest a major break for the conglomerate, a more promising future than the past. This is the kernel of demand for the shares of the conglomerate.

     

     

  • Transcorp: A new dawn?

    Transcorp: A new dawn?

    Transnational Corporation of Nigeria (Transcorp) Plc is breaking new ground with its first-ever dividend payment. With 42 per cent growth in turnover and 129 per cent growth in pre-tax profit, the latest audited report and accounts appears to signal a new threshold for the conglomerate. Coming on the heels of the group’s new investments in power and hotel, Capital Market Editor, Taofik Salako, reports that Transcorp appears to be gaining momentum in operations and investors’ confidence

    Transnational Corporation of Nigeria (Transcorp) Plc was one of the most active stocks at the Nigerian stock market last week. With about 11 per cent of aggregate turnover, transactions on the conglomerate underlined the upbeat interplay of demand and supply for its shares. The momentum at the stock market was spurred by the announcement of the conglomerate’s audited report and accounts for the year ended December 31, 2013; including its first-ever dividend recommendation.

    The 2013 business year marked a new phase for Transcorp, fundamentally and technically. With a full-year capital appreciation of 314.29 per cent in 2013, its share price trend at the Nigerian Stock Exchange (NSE) underscored the optimism as the conglomerate moved from one growth initiative to another. These initiatives, many analysts had posited, should reflect positively on the fundamentals of the conglomerate. The audited report appears to justify the bullishness.

    Both profit and loss accounts and balance sheet showed a stronger, more efficient and profitable group with almost a double in average profit on each unit of transaction. Turnover rose by 42 per cent to N18.8 billion in 2013 as against N13.2 billion recorded in 2012. Gross profit also grew by 47 per cent from N9.77 billion to N14.37 billion. After operating deducting expenses, operating profit jumped by 172.6 per cent to N10.25 billion in 2013 as against N3.76 billion in 2012. Profit before tax doubled by 129 per cent from N3.95 billion to N9.03 billion. After taxes, net profit for 2013 rose by 175 per cent to N6.96 billion compared with N2.53 billion in 2012.

    Underlying fundamental indices showed a generally positive outlook. Gross profit margin had increased from about 74 per cent in 2012 to 76.3 per cent in 2013. Operating profit margin almost doubled at 54.4 per cent in 2013 as against 28.4 per cent in 2012. Profit before tax margin, which is globally regarded as a main index for profitability, leapt from 29.8 per cent in 2012 to 47.96 per cent in 2013.

    Total assets expanded to N149.46 billion in 2013 compared with N99.56 billion in 2012. Shareholders’ funds also leapt from N64.1 billion to N86.7 billion. Total liabilities stood at N62.79 billion as against N35.46 billion.

    With the empathic top-down profitability, the board of directors of Transcorp has recommended distribution of N1.9 billion as cash dividends to shareholders, the first time the conglomerate will be making such payment since incorporation. The breakdown of the dividend recommendation showed that shareholders would receive a dividend per share of 5.0 kobo. The dividend will be paid on Tuesday, April 1, 2014 to all shareholders in the book of the conglomerate as at Friday, March 7, 2014.

    Most analysts have commended the performance of the conglomerate. Renaissance Capital said the numbers were impressive and encouraging, waging a stake that Transcorp’s current market consideration is an understatement of its potential. Vice president, Africa equity sales, equities / African equity product distribution, Renaissance Capital, Akinbamidele Akintola said the performance of Transcorp reflected the additional power business acquired in 2013, which would further impact the overall performance going forward.

    “We find the numbers very impressive. We are pleasantly surprised that Transcorp decided to pay dividend for the first time at all, especially as they are entering into a growth period. We are optimistic that there would be a dramatic change in their numbers going into 2014 as the transformation process continues,” Akintola stated.

     

    Building the power base

     

    Transcorp’s 2013 results included early gains from the acquisition of the Ugheli Power Plant in 2013. Transcorp, through its subsidiary, Transcorp Ugheli Power Limited (TUPL), had in 2013 acquired Ugheli Power Plant for $300 million from the Federal Government of Nigeria. With installed capacity of 972 megawatts, current generating capacity of 360 megawatts and potential output of 1070 megawatts, the Ugheli power plant thickened the basket of the conglomerate’s businesses in strategic sectors including Transcorp Hilton Hotel, Abuja; Transcorp Hotels, Calabar; Teragro Commodities Limited and Transcorp Energy Limited, operator of OPL 281. Power, upstream oil, hospitality and agriculture; the combination of businesses and sectors makes for a robust outlook, given the synergies in these fastest growing and dominant sectors of the Nigerian economy. Often cited in relation to the boom in the telecommunications sector, most analysts perceive the power firms as cash cows that would not only generate power but significant returns for investors. The monopolistic nature of the system and centrality of the success of the privatization to government’s transformation agenda confer enormous advantages on the power companies.

    Transcorp Ughelli Power Ltd (TUPL) early this year signed a capacity-expansion agreement with General Electric to expand the Ughelli power plant by 1000 megawatts over the next three to five years. Transcorp and GE also signed a separate agreement to rehabilitate the damaged GT 15 turbine at the Ughelli plant, which will add 115 megawatts to the plant’s output. Currently, the Transcorp Ughelli power plant generates 360 megawatts, up from 160 megawatts on November 1, 2013 when Transcorp took ownership of the plant. With the additional 115 megawatts, as well as other rehabilitation works planned at the plant, the company projects that output at Ughelli will increase to 700 megawatts by December 2014. The Ughelli power plant is Nigeria’s largest gas-fired electricity generation asset.

    Both Transcorp and GE believed the partnership would drive new momentum in the power industry. Chairman, Transnational Corporation of Nigeria (Transcorp), Mr. Tony Elumelu and Global Chairman, General Electric, Jeffrey Immelt, who signed the agreements were enthusiastic about the potential of the conglomerate. Elumelu noted that GE would bring its proven global leadership in power technology development to bear on the Ughelli plant expansion project.

    “With this, we’ve taken a bold step in fulfilling our promise to Transcorp’s stakeholders and the people of Nigeria. In a very short period of time, we have achieved significant impact – power production has more than doubled, and with this agreement, we will see increased output before the end of this year. We are confident that this partnership with GE will further accelerate the achievement of our goals in the power sector,” Elumelu said.

    Immelt affirmed the readiness of GE to support Nigeria’s power development programme. “GE fully appreciates the confidence expressed by Transcorp. We are happy to bring the considerable resources of GE to support Transcorp’s audacious vision for Nigeria’s Power industry. This partnership with Transcorp underlines GE’s deep commitment to developing the Nigerian power sector,” Immelt said.

    More luxuries

    The Ugheli power plant agreement came on the back similar deal by the conglomerate with Hilton Worldwide to build a new premier hotel in the up-market suburb of Ikoyi, Lagos. The proposed Transcorp Hilton Lagos, a full service, 350-room hotel on Glover Road, Ikoyi, will be the Hilton Group’s second hotel in Nigeria by Transcorp, following the award-winning Transcorp Hilton Hotel Abuja, which is one of the leaders in Hilton’s global network. The new hotel will be jointly owned by Transnational Hotels and Tourism Services Ltd, the hospitality subsidiary of Transcorp and Heirs Holdings.

    Elumelu outlined that the Ikoyi development, along with the extensive refurbishment and upgrade of the group’s existing hotels in Calabar and Abuja, demonstrated the group’s commitment to driving growth in real estate and hospitality, a strategic sector for Nigeria’s economic development.

    According to him, the new Transcorp Hilton Lagos will not only present an additional world-class venue for the increasing numbers of investors, businessmen and tourists to Nigeria, but is creating much-needed jobs for citizens, enabling their social and economic development.

    Managing Director, Transnational Hotels and Tourism Services Limited, Valentine Ozigbo said the Transcorp Hilton Lagos will grant the many Hilton Honors customers their desire to see a world-class establishment under their preferred brand in the Lagos. He said the hotel will boast of full conference facilities, meeting rooms, gym and spa, and a swimming pool in an iconic design that will certainly add verve to the Lagos landscape.

    Besides, Transcorp has recently undertaken several strategic initiatives to enable stable growth. In 2013, it raised N12.91 billion through a rights issue of 12.91 billion ordinary shares of 50 kobo each at N1 per share. The net proceeds of the rights issue estimated at N12.52 billion was scheduled mainly to refinance the loan taken to acquire the Ugheli power plant. About 79 per cent of the net proceeds amounting to N9.84 billion would be used to refinance Ugheli Power. The conglomerate would use N1.63 billion, 13 per cent of net proceeds, for exploration and development of its oil block, Oil Prospecting Licence (OPL) 281. It had revised the terms of partnership in the OPL 281 to fully take responsibility for the operation of the block in its bid to become a leading Nigerian indigenous oil and gas upstream company with production. The balance of N1.05 billion, representing 8.0 per cent of net proceeds, would be used to develop new hotels Port Harcourt and Lagos; in order to boost the conglomerate’s hospitality business in the South-South and South-West of Nigeria.

     

    Looking forward

     

    Directors of Transcorp are confident the conglomerate has built a strong foundation to sustain its upwardly performance. President and group chief executive officer, Transnational Corporation of Nigeria (Transcorp) Plc, Mr. Obinna Ufudo said that the 2013 performance reflected the conglomerate’s commitment to its long term strategic plan of strong and sustainable growth.

    “We are excited about the achievements we recorded across our businesses within the past year. Our entry into the power sector has been a significant driver and we are already running ahead of our 2014 estimates. We expect significantly better results this year, as our diversification and growth strategies continue to gain momentum,” Ufudo said.

    According to him, the strong balance sheet, substantial liquidity, diversified earnings and robust cash flow and the returns to shareholders are consistent with the group’s priorities and they are important signals of its confidence in the growth plans for a continuing profitable future.

    “We expect significantly better results this year as our diversification and growth strategies take firmer roots,” Ufudo said, raising the stakes for 2014.

    Already hailed as a turnaround manager by several shareholders, Elumelu, whose Heirs Holdings became strategic shareholder in Transcorp in 2013, said it was pleasing to be recommending a dividend to shareholders for the first time in the company’s history. The modest dividend, according to him, is the beginning of a very bright future for all the patient and loyal shareholders.

    “With the tremendous progress we have already recorded in our power business – taking the Ughelli plant’s power output from 160mw when we took over on November 1, 2013 to 360mw within three months, 2014 promises to be a very rewarding year for the company and our 300,000 shareholders,” Elumelu said.

    While its troubled past may linger and continue to moderate immediate share consideration, the fundamental outlook and ongoing initiatives suggest a major break for the conglomerate, a more promising future than the past. This is the kernel of demand for the shares of the conglomerate.

     

     

  • Transcorp rallies on General Electric’s power agreement

    •Unity Bank offers 50.3% equity in UnityKapital Assurance for sale

    Transnational Corporation of Nigeria (Transcorp) Plc played the contrarian stock at the weekend as the conglomerate’s power subsidiary, Transcorp Ughelli Power Ltd (TUPL), signed a capacity-expansion agreement with General Electric to its Ughelli power plant by 1000 megawatts over the next three to five years.

    Transcorp’s share price rose by 9.80 per cent at the Nigerian Stock Exchange (NSE), nearly the maximum 10 per cent allowable daily change, as the news of the agreement filtered into the stock market at the weekend. Transcorp and GE also signed a separate agreement to rehabilitate the damaged GT 15 turbine at the Ughelli plant, which will add 115 megawatts to the plant’s output.

    Currently, the Transcorp Ughelli power plant generates 360 megawatts, up from 160 megawatts on November 1, 2013 when Transcorp took ownership of the plant. With the additional 115 megawatts, as well as other rehabilitation works planned at the plant, the company projects that output at Ughelli will increase to 700 megawatts by December 2014. The Ughelli power plant is Nigeria’s largest gas-fired electricity generation asset. It was purchased by Transcorp for $300 million during the 2013 power privatization programme.

    The agreements were signed at a closed door meeting between executives of both companies, led by chairman, Transnational Corporation of Nigeria, Mr. Tony Elumelu and Global Chairman of General Electric, Jeffrey Immelt. The agreement followed a cooperation agreement executed by Transcorp and GE in 2013.

    Elumelu expressed satisfaction with the partnership noting that GE would bring its proven global leadership in power technology development to bear on the Ughelli plant expansion project.

    “With this, we’ve taken a bold step in fulfilling our promise to Transcorp’s stakeholders and the people of Nigeria. In a very short period of time, we have achieved significant impact – power production has more than doubled, and with this agreement, we will see increased output before the end of this year. We are confident that this partnership with GE will further accelerate the achievement of our goals in the power sector,” Elumelu said.

    Immelt affirmed the readiness of GE to support Nigeria’s power development programme.

    “GE fully appreciates the confidence expressed by Transcorp. We are happy to bring the considerable resources of GE to support Transcorp’s audacious vision for Nigeria’s Power industry. This partnership with Transcorp underlines GE’s deep commitment to developing the Nigerian power sector,” Immelt said.

    Meanwhile, Unity Bank Plc is seeking to dispose its majority 50.3 per cent equity stake in UnityKapital Assurance Plc as part of its efforts to comply with the current banking regulatory regime. The Central Bank of Nigeria (CBN) had directed all banks in Nigeria to either divest from non-banking subsidiaries or adopt a holding company structure.

    The bank has already appointed Capital Assets Limited as financial advisers in the divestment of the equity stake. Both Unity Bank and UnityKapital Assurance are quoted on the

    Total turnover at the NSE last week stood at 2.22 billion shares worth N21.05 billion in 27,855 deals. Financial services sector accounted for 1.26 billion shares valued at N12.02 billion in 14,923 deals. The three most active stocks were Champion Breweries Plc, FCMB Group Plc, and Transcorp, which altogether accounted for 775.93 million shares worth N1.96 billion in 1,563 deals, about 34.9 per cent of aggregate turnover volume.

    The overall market situation last week was negative as equities witnessed consecutive decline throughout the five-day trading session. The main index at the stock market, the All Share Index (ASI), indicated a week-on-week decline of 3.21 per cent dropping from opening index of 41,917.55 points to close at 40,571.62 points. The downtrend last week depressed the average year-to-date return to -1.83 per cent.

     

  • BN Holdings, Transcorp to pay dividends

    FBN Holdings Plc, the holding company for First Bank of Nigeria (FBN) Limited and other financial services companies, and Transnational Corporation of Nigeria (Transcorp) Plc have confirmed that they will pay dividends for the year ending December 31, 2013.

    Regulatory filings submitted to the Nigerian Stock Exchange (NSE) obtained by The Nation at the weekend indicated that the two companies have started definitive moves to ensure payment of dividends for the year.

    The confirmations of the dividend payment indicated the confidence of the boards of directors on the third quarter earnings and the last quarter of the year.

    The board of FBN Holdings stated that it had undertaken the group-wide audit of the third-quarter earnings of its subsidiaries to ensure that it receives dividends from its subsidiaries for onward distribution to shareholders.

    According to the board, FBN Holdings has chosen to audit the financial statements to ensure that the holding company, a non-operating entity sharing the same December year-end with its subsidiaries, receives dividend income from its subsidiaries within the year and as such enable FBN Holdings to pay dividend to shareholders for the year ended December 31, 2013.

    FBN Holdings indicated that it has concluded the audit process and submitted its audited financial statements to the Central Bank of Nigeria (CBN) for approval, noting that once it receives the CBN’s approval for the audited financial statements, it will submit the third quarter accounts to the NSE.

    FBN Holdings stated that it expected to receive the CBN’s approval anytime within the next 12 days. It, therefore, requested the NSE to grant it a two-week extension of the submission deadline for its third quarter earnings of December 13, 2013.

    Also, the board of Transcorp has resolved that the conglomerate would pay dividends for the business year.

    At their board meeting, directors of the conglomerate unanimously resolved that they will recommend to the shareholders of the company the payment of dividends at the end of the financial year ending December 31, 2013.

    The dividend consideration, according to the board, was based on the impressive third quarter report for the nine-month period ended September 30, 2013 and in further consideration of the fact that since the listing of the company’s shares on the NSE in December 2006, the public who bought into the conglomerate has not earned any dividends.

    The board, however, stated that the quantum of the dividend recommended herein shall be determined at the end of the year, subject to the final audited accounts and required regulatory approvals or consent.

    Meanwhile, the Asset Management Corporation of Nigeria (AMCON) has indicated that it will redeem its N1.70 trillion zero-coupon Series 1 bonds due in December 31, 2013 at par value on December 30, 2013.

    The corporation noted that the redemption is in accordance with Clause 15 and Condition 11.1 of the Amended and Related Trust Deed and terms of the Series 1 pricing supplement.

    Meanwhile turnover at the NSE last week stood at 2.77 billion shares worth N18.67 billion in 24,007 deals. The financial services industry led the activity chart with 1.89 billion shares valued at N8.83 billion in 12,359 deals; thus contributing 68.43 per cent of total turnover.

    The market remained skewed in favour of low-priced stocks with the trio of Unity Bank Plc, Transcorp and E-Tranzact International Plc accounting for 1.50 billion shares worth N2.49 billion in 2,686 deals, representing 54.4 per cent of total turnover during the week.

    The market closed on a positive note in spite of frequent profit-taking transactions that characterised transactions. The All Share Index (ASI) inched up by 0.24 per cent to close the week at 38,831.59 points while aggregate market capitalisation of all equities appreciated by 0.29 per cent to close at N12.427 trillion.

  • What premium for Transcorp?

    What premium for Transcorp?

    Transnational Corporation of Nigeria (Transcorp) Plc has sustained impressive uptrend as the most active and fastest rising stock at the stock market in recent weeks. Now with the second highest average year-to-date return at the stock market, Capital Market Editor, Taofik Salako reports that while demand suggests strong prospects of further appreciation, the next earnings period may be decisive for the conglomerate.

    Transnational Corporation of Nigeria (Transcorp) Plc appears to be the toast of investors at the stock market. With the largest volume of activities and the highest capital appreciation week-on-week, it has sustained enviable position atop the activity chart at the stock market. Average year-to-date return at the stock market, as measured by the All Share Index (ASI) of the Nigerian Stock Exchange (NSE), opens today at 39.77 per cent. Transcorp meanwhile opens with a year-to-date return of 459.05 per cent, trailing behind the Forte Oil, which opens with average year-to-date return of 1,321.22 per cent. Forte Oil, previously the fastest rising stock, had been slowed down in recent weeks by profit-taking transactions, with investors taking profit and relocking their gains into other stocks.

    For Transcorp, the recent share price rally and scramble started with the confirmation and, subsequently, the handover of its new acquisition- a power plant. As news made the round that Transcorp, alongside other bidders, had completed the acquisition of unbundled power plants, investors rushed shares of Transcorp, the only quoted company and publicly available window to participate in the privatisation of the power sector. Transcorp, through its subsidiary, Transcorp Ugheli Power Limited (TUPL), had in August completed acquisition of Ugheli power plant with the payment of $225 million to complete the $300 million bid price for the power plant. Transcorp had earlier made initial payment of $75 million, being required 25 per cent initial payment by bid winner. Transcorp then started a gradual rise, which fervour has continued to increase with the passing of every week. From a share price range of N1.33 in late August, Transcorp’s share price opens today t year-to-date high of N5.87 per share. This represents an increase of 341.4 per cent in the past three months.

    A rush for power

     

    Transcorp is the anchor company in the Transcorp consortium, which included companies such as Wood Rock; Symbion Power LLC, USA; Medea Development; PSL Engineering and Control and Thomassen Services and Contracting Company. With installed capacity of 972 megawatts, current generating capacity of 300 megawatts and potential output of 1070 megawatts, the Ugheli power plant thickens the basket of the conglomerate’s businesses in strategic sectors including Transcorp Hilton Hotel, Abuja; Transcorp Hotels, Calabar; Teragro Commodities Limited and Transcorp Energy Limited, operator of OPL 281. Power, upstream oil, hospitality and agriculture; the combination of businesses and sectors appear to make for a robust outlook, given the synergies in these fastest growing and dominant sectors of the Nigerian economy. Often cited in relation to the boom in the telecommunications sector, most analysts perceive the power firms as cash cows that would not only generate power but significant returns for investors. The monopolistic nature of the system and centrality of the success of the privatization to government’s transformation agenda confer enormous advantages on the power companies.  But such enthusiasm is not reflecting on the market consideration of the conglomerate at the stock market, the best indicator to gauge public perception. This is more evident given that Transcorp holds the distinction as the only publicly quoted company with a pie of the power sector.

     

    Growing conglomerate

    Besides the acquisition of the Ugheli power plant, Transcorp has recently undertaken several strategic initiatives to enable stable growth. Transcorp recently concluded a rights issue of 12.91 billion ordinary shares of 50 kobo each at N1 per share. The net proceeds of the rights issue estimated at N12.52 billion was scheduled mainly to refinance the loan taken to acquire the Ughelli power plant. About 79 per cent of the net proceeds amounting to N9.84 billion would be used to refinance Ughelli Power. The conglomerate would use N1.63 billion, 13 per cent of net proceeds, for exploration and development of its oil block, Oil Prospecting Licence (OPL) 281. The balance of N1.05 billion, representing 8.0 per cent of net proceeds, would be used to develop new hotels Port Harcourt and Lagos; in order to boost the conglomerate’s hospitality business in the South-South and South-West of Nigeria.

    Transcorp is also pushing for growth on other frontiers. It had revised the terms of partnership in its Oil Processing License 281 (OPL 281) in Nigeria. The revised terms were said to be as a result of a change of control in Transcorp as the conglomerate sought to fully take responsibility for the operation of the block in its bid to become a leading Nigerian indigenous oil and gas upstream company with production. It recently signed a new deal with Hilton Worldwide to build a new premier hotel in the up-market suburb of Ikoyi, Lagos. The proposed Transcorp Hilton Lagos, a full service, 350-room hotel on Glover Road, Ikoyi, will be the Hilton Group’s second hotel in Nigeria by Transcorp, following the award-winning Transcorp Hilton Hotel Abuja, which is one of the leaders in Hilton’s global network. The new hotel will be jointly owned by Transnational Hotels and Tourism Services Ltd, the hospitality subsidiary of Transcorp and Tony Elumelu’s Heirs Holdings.

    Speaking at the official signing of the management contract, Chairman, Transnational Corporation of Nigeria, Mr. Tony Elumelu said the agreement marked another milestone in the long-standing partnership with Hilton Worldwide.  According to him, the Ikoyi development, along with the extensive refurbishment and upgrade of the group’s existing hotels in Calabar and Abuja, demonstrated the conglomerate’s commitment to driving growth in real estate and hospitality, a strategic sector for Nigeria’s economic development.

    “The new Transcorp Hilton Lagos will not only present an additional world-class venue for the increasing numbers of investors, businessmen and tourists to Nigeria, but is creating much-needed jobs for our citizens, enabling their social and economic development,” Elumelu, who doubles as chairman of Heirs Holdings, said.

    Managing Director, Transnational Hotels and Tourism Services Limited, Valentine Ozigbo said the Transcorp Hilton Lagos will grant the many Hilton Honors customers their desire to see a world-class establishment under their preferred brand in the Lagos.

    He said the full construction works for the new hotel will commence early 2014 pointing out that the hotel will boast of full conference facilities, meeting rooms, gym and spa, and a swimming pool in an iconic design that will certainly add verve to the Lagos landscape.

    For the board of Transcorp, its expanding business lines will deliver both shareholders’ values and social values. According to Elumelu, the conglomerate’s power business would create long-term social and economic values for all stakeholders as it would leverage on the successful acquisition of Ugheli to consolidate its growth strategy in Nigeria’s power sector.

    “We can now embark fully on our strategy to contribute to the development of Nigeria’s power sector, whilst creating long term economic and social value for our stakeholders and the greater community. We fully expect our engagement on this world-class project to improve the living standards of all Nigerians as well as impact positively on our country’s GDP,” Elumelu said.

    President, Transnational Corporation of Nigeria (Transcorp) Plc, Mr. Obinna Ufudo said TUPL has extensive worldwide power sector experience in Africa, Europe and the Middle East which underscores its unquestionable capacity to effectively manage the plant profitably in line with international standards.

    According to him, the conglomerate plans to increase the power generation of the plant from 300 megawatts to more than 1070 megawatts over the next five years. Chief executive officer, Transcorp Ughelli Power Limited (TUPL), Adeoye Fadeyibi added that the company plans to deliver on capacity targets and sustain the momentum using highly efficient people and resources to achieve operational excellence.

    Obviously, Transcorp is riding on the momentum of the power business and the new hotel deals. Besides, investors appear to see a more coordinated and determined approach to the growth of the conglomerate. But beyond the immediate enthusiasm, emerging corporate earnings of the conglomerate and steadiness of its business development strategy will determine the medium to long-term relativity of the share pricing trend. With its troubled background still casting doubts in the minds of several investors, Transcorp needs to deliver tangible and demonstrable returns to sustain growing investors’ confidence.

  • Investors scramble for Transcorp over new power business

    There has relatively been more demand than supply for shares of Transnational Corporation of Nigeria (Transcorp) Plc as investors continued to respond to the official handover of the 1,000 megawatt Ughelli power plant to Transcorp Ughelli Power Limited (TUPL) at the weekend.

    TUPL, a subsidiary of Transcorp, last Friday took ownership of Ughelli Power Plc, the owner and operator of the 1000 megawatts Ughelli Power Plant, following at a ceremony by the Federal Government at the plant in Ughelli, Delta State.

    Ughelli Power Plc, operator of the Ughelli Power Plant, is one of the six power generation firms unbundled from the Power Holding Company of Nigeria (PHCN). By August 21, this year, TUPL, which had won the bid for the plant, had effected full payment of $300 million to the Bureau of Public Enterprises (BPE) representing 100 per cent of TUPL’s bid price for the plant.

    Market consideration of Transcorp opened this week with a gain of 2.67 per cent to N1.92 per share at the Nigerian Stock Exchange (NSE). There are expectations that the stock may set a new high over the next few trading days, given the momentum of trading. Transcorp currently has a 52-week high of N2.02, 10 kobo more than its opening price of N1.92 yesterday.

    Managing director, GTI Securities, Mr. Tunde Oyekunle, said Transcorp was a stock to watch based on the potential of its new power business and investments in other segments of the economy.

    Commenting on the prospects of the new power business, Chairman, Transnational Corporation of Nigeria (Transcorp), Mr Tony Elumelu, said Transcorp and its partners Tenoil, Symbion Power, Thomassen and Woodrock Energy were well- positioned and have the required expertise to operate a world-class power generation plant that will transform the power sector and change the lives of its citizens.

    Chief Executive Officer, Transcorp Ughelli Power Limited (TUPL), Adeoye Fadeyibi, said the firm is poised to positively impact on the socio-economic development of Nigeria by improving living standards through regular and adequate power supply.

    “We will increase the power generation of the plant from 300 megawatts to over 1500 megawatts in the next five years and we have the requisite capacity in finance and human capital to achieve our strategy,” Fadeyibi said.

    Elumelu reiterated Transcorp’s unflagging commitment to invest in host communities wherever the organisation operates with the aim of creating jobs, providing training and ensuring vital knowledge and skills transfer where possible thus ensuring sustainable contribution to Nigeria’s economic and social development .

    According to him, Transcorp will actively engage the local communities in and around Ughelli to work together with the unified objective of ensuring that lives are improved and the larger economy is revived.

    Vice President Namadi Sambo, who was represented by Mr. Emeka Wogu, Honorable Minister for Labour and Productivity at the handing over ceremony had noted that the handover ceremony is the culmination of 14 years of painstaking efforts by the National Council on Privatisation (NCP) and its Secretariat, the Bureau of Public Enterprises (BPE), the Federal Ministry of Power and other key stakeholders to reform and liberalise Nigeria’s electricity industry.

    He outlined that the reform and privatisation programme was rightly focused on the big picture of impacting on the economy as a whole and ultimately, the greatest good for the greatest number of Nigerians.

    “I congratulate Transcorp for emerging as the successful winner through a very rigorous, competitive and transparent process. We appreciate your faith in the process and your faith in the Nigerian Government and economy,” Sambo said.

  • ‘Ughelli Power Plant can only boast of 300 MW’

    Only 300Megawatts out of 972 Megawatts of electricity at the Transcorp Ughelli Power Plant, Delta State is dependable, the Company’s Chief Executive Officer, Adeoye Fadeyibi, has said.

    He told The Nation that the company met 972 megawatts on ground, but discovered that there is only 300 megawatts capacity.

    He said the company has enough gas to run its plant, despite that the product poses a problem to the growth of the industry.

    “Though gas in an issue in the industry, it is not a general concern across all the power generation companies (GENCOs). What we have done in Ughelli Power Company is to look at the gas in place and see how far we can go. Based on our business model, we have enough gas to run 400 mega- watts. We have excellent personnel at the plant. I’m talking about existing resources in addition to support from international organisations. We are putting the right resources in place to foster the growth of the company,’’ he said.

    Fadeyibi said the company has a rehabilitation plan, adding that it is committed to the transformation of the sector. He said this is the time to invest in power because there is market for it.

    “We have to give the market a credit. We have a national bulk trader ( the Nigerian Bulk Electricity Trading Plc (NBET). It is a party that sits between us and the Nigerian Electricity Regulatory Commission (NERC). We have a suitable market in place to operate,’’ he added.

    Similarly, the Chairman, National Electricity Regulatory Commission, Dr. Sam Amadi, said the coming of the 14 power generation and distribution companies would help in developing the sector. He said the firms would help in improving power supply and boosting socio-economic activities.

  • NSE lists Transcorp’s rights issue

    NSE lists Transcorp’s rights issue

    Transnational Corporation of Nigeria Plc (Transcorp) is pleased to announce the official listing of its Rights Issue of 12,906,999,142 ordinary shares on the floor of the Nigerian Stock Exchange (NSE).

    The President/CEO of Transcorp Mr. Obinna Ufudo remarked that the Rights Issue was 132.08% subscribed thus confirming the unflinching support and trust reposed in the current Board and Management of the company by its shareholders. All excess monies and interest accrued thereon have been returned to the subscribers.

    He stated further, “We thank our Shareholders for this significant show of support of our turnaround initiatives.  The funds raised further strengthen our ability to conclude existing transactions and initiate new investments in line with our vision. The future just got brighter for the company and our 300,000 shareholders”.

    In line with the Rights circular, the funds raised will be used mainly to refinance the company’s investments in the acquisition of Ughelli Power Plc and deepening its play in the Hospitality and Oil and Gas sectors.

    Transcorp, through its subsidiary, Transcorp Ughelli Power Limited, owns the $300million Ughelli Power Plant acquired under the privatization of the Nigerian power assets by the Federal Government. The company is also embarking on new hospitality projects in Lagos while refurbishing and expanding the Transcorp Hilton Hotel, Abuja.

    With the listing today, the market capitalization of Transcorp increased by about 54% from N35.4billion to N54.6billion further restating the company as one of the most capitalized stocks on the Nigerian Stock Exchange.