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Tag: Transcorp

  • Will power plant recharge Transcorp?

    The acquisition of 972-megawatts Ughelli power plant last week by Transnational Corporation of Nigeria (Transcorp) Plc turned investors’ attention to the loud, low-priced stock. Transcorp was the most active stock but the dithering on its share price underscored underlying fears about the conglomerate. Capital Market Editor Taofik Salako reports

     

    Transnational Corporation of Nigeria (Transcorp) Plc emerged the most active stock on the Nigerian Stock Exchange (NSE) last week, contributing about 11.45 per cent of aggregate turnover during the week.

    Transcorp recorded a turnover of 127.63 million shares valued at N163.51 million in 697 deals, about 98.5 per cent of total turnover volume of 129.62 million shares worth N223.10 million traded in 961 deals in the conglomerates sector. Total turnover stood at 1.12 billion shares valued at N12.94 billion in 24,489 deals.

    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 Ughelli Power Limited (TUPL), last Wednesday completed acquisition of Ughelli 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. On Thursday, Transcorp was the most active stock and recorded more than 27 per cent of its weekly turnover volume as investors staked N45.29 million on 34.87 million shares in 215 deals. The scramble also nudged the share price by 8.13 per cent to N1.33, a significant increase when compared with stock market’s average return of -0.60 per cent on Thursday.

    In the second trading session after the formal announcement and the last trading day for the week, Transcorp sustained as the most active stock but with less transactions and at lower value. It recorded a turnover of 27.04 million shares valued at N34.86 million in 164 deals. Most investors appeared unwilling to place a premium on the stock, forcing the share price to drop by 2.26 per cent to N1.30, the same value it had started the week. Against the average weekly decline of 1.11 per cent for the stock market, Transcorp’s flat performance might appear considerable. However, for a conglomerate that had just closed a much-sought after power sector deal, it belies the significance of the transaction.

     

    Power in the group

    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 privatisation 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.

     

    Long road to redemption

    Transcorp appears to still wriggle in the lurking ghosts of previous failed promises and dashed hopes. For most non-insider investors in Transcorp, it has been a long waiting for any form of return or recuperation-cash dividend, bonus share or capital appreciation. Incorporated in 2004, Transcorp was touted as the next frontier of African investment and Nigeria’s investment vehicle in the global economy. Its vision was to become the largest and most successful Africa-based conglomerate while the mission was to drive Africa’s integration into the global economy by becoming a Nigerian-based multi-national conglomerate with between $5 billion and $10 billion annual revenue and market capitalisation of between $30 billion and $60 billion within five to seven years. As a conglomerate, Transcorp’s interests span agriculture, energy, real estate, hospitality and trade and commerce. All these were woven around enticing returns to shareholders.

    Nearly a decade after it raised several billions of Naira from investors with a promise to be the pride of shareholders, Transcorp is still yet to find neither the fundamental stability nor the technical appreciation to deliver any commensurate return. After a railroaded application and waiver that exempted Transcorp from the required minimum operational years and audited accounts, the conglomerate was listed in November 2006. The share price leapt from a low of N6 per share to close the year at a high of N9.71. However, realities soon set in. Transcorp closed 2007 at N3.14 per share, seven kobo above its lowest market consideration of N3.07 during the period. Thus, rather than the high hopes of a global multinational return, Transcorp returned full-year loss of 67.7 per cent to shareholders in its first full year on the stock market.

    By the time the entire capital market caught the cold from global financial and economic crises and domestic assets bubble in 2008, Transcorp had stripped to nominal value. In 2010, the conglomerate spiraled from a high of 57 kobo to close at a low of 50 kobo. In 2011, Transcorp traded within a range of a high of N1.82 and a low of 50 kobo and subsequently closed at 57 kobo per share. It however made an impressive return of 84.2 per cent to close 2012 at N1.05 per share. At opening price of N1.30 today, Transcorp carries a year-to-date return of 23.8 per cent, some six percentage points below market’s average return of 30.27 per cent.

     

    In search of stable fundamentals

    Transcorp recovery is also related to changes in the fundamentals of the company. Transcorp had posted a loss of N9.1 billion within the eight-month period ended December 2006. In 2007, loss after tax stood at N8.93 billion while investors contended with net loss of N6.70 billion in 2008. It broke the cycle in 2009 with a net profit of N1.2 billion. Latest audited report of Transcorp for the year ended December 31, 2012 showed that net profit after tax slumped by 56.8 per cent from N5.86 billion in 2011 to N2.53 billion in 2012. The decline depressed earnings per share from 7.74 kobo to 4.38 kobo. The report showed a top-down negative performance with marginal decline in sales magnified down the line by external and internal costs. Turnover dropped slightly from N13.90 billion to N13.24 billion. Gross profit slipped from N10.44 billion to N9.77 billion while operating profit dropped from N4.59 billion to N3.76 billion. Substantial increase in interest income moderated equally significant increase in interest expense, mitigating the adverse impact of the conglomerate’s huge debt exposure. Finance income jumped from N276.67 million to N1.04 billion while finance cost rose from N261.32 million to N860.25 million. With these, profit before tax dropped from N4.61 billion in 2011 to N3.95 billion in 2012. Half-year report for the period ended June 30, 2013 however showed strong potential for improved performance. Turnover stood at N7.85 billion while profits before and after tax closed the period at N3.61 billion and N2.48 billion respectively. Earnings per share thus stood at 5.53 kobo. This represents earnings yield of 4.25 per cent against the current market price. This highlights possible fundamental return outlook for the company.

     

    Deepening the growth

    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 eight 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.

    Speaking on prospects of the conglomerate, Chairman, Transnational Corporation of Nigeria (Transcorp) Plc Mr Tony Elumelu said conglomerate’s power business would create long-term social and economic values for all stakeholders. According to him, the conglomerate would leverage on the successful acquisition 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.

    The management of the conglomerate also shared this optimism.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.

    But beyond the immediate optimism and back-slapping of the new acquisition, Transcorp requires tangible and demonstrable returns to win investors’ confidence and bring the intrinsic values in its several businesses to bear on its share price.

     

     

  • Transcorp Hilton to host World Economic Forum

    The World Economic Forum (WEF), with headquarters in Geneva, Switzerland, has appointed the Transcorp Hilton, Abuja, the official hotel and hospitality partner for the 24th World Economic Forum on Africa (WEFA), which will hold in Nigeria for the first time next year.

    The three-day event, which will hold from May 7 to 10, next year, is expected to draw over 700 participants from about 40 countries.

    The conference will discuss the continent’s integration agenda and a renewed commitment to sustainable growth and development. Delegates will include regional and global leaders from business, government and the civil society.

    A team of the Local Organising Committee (LOC), led by former Information Minister Frank Nweke Jnr., met with the Managing Director and member of WEF Governing Board, Borge Brende, last week.

  • Transcorp’s net profit drops by 57%

    Transcorp’s net profit drops by 57%

    Transnational Corporation of Nigeria (Transcorp) Plc suffered a major reversal in its last year operations year as sluggish sales compounded high costs to shave off more than N3.3 billion from the net profit of the conglomerate.

    Audited report and accounts of Transcorp for the year ended December 31, 2012 showed that net profit after tax slumped by 56.8 per cent from N5.86 billion in 2011 to N2.53 billion in 2012. The decline depressed earnings per share from 7.74 kobo to 4.38 kobo.

    The report showed a top-down negative performance with marginal decline in sales magnified down the line by external and internal costs. Turnover dropped slightly from N13.90 billion to N13.24 billion. Gross profit slipped from N10.44 billion to N9.77 billion while operating profit dropped from N4.59 billion to N3.76 billion.

    Substantial increase in interest income moderated equally significant increase in interest expense, mitigating the adverse impact of the conglomerate’s huge debt exposure. Finance income jumped from N276.67 million to N1.04 billion while finance cost rose from N261.32 million to N860.25 million. With these, profit before tax dropped from N4.61 billion in 2011 to N3.95 billion in 2012.

    Transcorp is seeking to recapitalise its business through a rights issue of 12.91 billion ordinary shares of 50 kobo each at N1 per share. The rights issue, pre-allotted on the basis of one new share for every two held, is expected to close on Friday.

    The net proceeds of the rights issue estimated at N12.52 billion would be used mainly to refinance the loan taken to acquire its power business-Ughelli Power Plc. 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.

    Chairman, Transnational Corporation of Nigeria (Transcorp) Plc, Mr Tony Elumelu, in the rights circular to shareholders, said the recapitalisation was in recognition of the need to reposition the company for future challenges and business opportunities.

    He said the company’s vision is to create sustainable value for its stakeholders in its chosen markets.

    “In order to realise this long-term objectives, the company is making every effort to identify and take advantage of every investment opportunity that will complement its long-term strategic objectives. We will continue to look out for investment opportunities that will enhance value creation for our stakeholders,” Elumelu said.

    He urged shareholders to pick up their rights in order to continue to enjoy the full benefits of their investments pointing out that the company’s future holds plenty of interesting opportunities as it would continue to achieve progressive levels of success in all areas of its business.

     

  • Vigeo, Transcorp, nine others pay $469.03m for PHCN assets

    Vigeo, Transcorp, nine others pay $469.03m for PHCN assets

    Ahead of today’s deadline for preferred bidders for the successor companies unbundled from the Power Holding Company of Nigeria (PHCN) to make the mandatory 25 per cent payment of the offer value of their bids, 11 bidders have paid $469.03million for 12 of the successor companies.

    The Bureau of Public Enterprises (BPE) in a statement yesterday confirmed receipt of the payment from bidders for the distribution and generation companies. It said that three preferred bidders were yet to pay.

    The BPE listed the bidders that paid yesterday, March 20, 2013, as Vigeo Consortium, the preferred bidder for Benin Distribution Company, which paid $32.25million, being the mandatory 25 per cent of the bid value of the Benin Disco; Transcorp/Woodrock Consortium, that paid $75 million; being 25 per cent of the bid value for Ughelli Power Plc; CMEC/EUAFRIC Energy JV that paid $50,249,965; being 25 per cent of the bid value for Sapele Power Plc; Kann Consortium, paid $41 million; being 25 per cent of the bid value for Abuja Distribution Company.

    Others are, Aura Energy that paid $20,464,968.15; being 25 percent of the bid value for Jos Distribution Company; Mainstream Energy Limited, which paid $59,467,500, being 25 per cent of the bid value for Kainji Power Plc; and Sahelian Power SPV, that paid $34.25million; being 25 per cent of the bid value for Kano Distribution Company.

    The BPE listed other bidders that had earlier paid the mandatory 25 per cent of the bid value of the PHCN successor companies, as Amperion Power Company Limited, the preferred bidder for Geregu Power Plc, which paid $33 million; Integrated Energy Distribution & Marketing Company, the preferred bidder for Ibadan and Yola Distribution Companies, which paid $42.25 million and $14.75 million for Ibadan and Yola Discos respectively; NEDC/KEPCO, the preferred bidder for Ikeja Distribution Company, which paid $ 32.75 million; and West Power & Gas, the preferred bidder for Eko Distribution Company which paid $33.75 million.”

    The BPE said it is expecting payment from 4Power Consortium, the preferred bidder for Port-Harcourt Disco; Interstate Electrics Limited, preferred bidder for Enugu Disco; and North-South Power Company, preferred bidder for Shiroro Power Plc.

  • Transcorp to raise new equity funds for power projects

    Transcorp to raise new equity funds for power projects

    Transnational Corporation of Nigeria (Transcorp) Plc would use the net proceeds from its planned rights issue to finance its investments in power projects.

    A source close to the company told The Nation that the net proceeds from the supplementary rights issue that would likely open in the second quarter would be used to specifically finance power projects.

    According to the source, the rights issue was decided on because of the importance of equity funds as major catalyst towards achieving rapid growth in this phase of the conglomerate business.

    “It is in line with our planned strategy and will specifically be used in power as well as other investments pre-identified for this purpose,” the source stated.

    Transcorp had intimated the investing public that it plans to raise new equity funds from its shareholders through the issuance of 13 billion new ordinary shares of 50 kobo each.

    The conglomerate plans to increase its authorised share capital to create headroom for the supplementary issue. It would be increasing its authorised share capital from N18 billion to N22.55 billion ordinary through the creation of 9 billion new ordinary shares of 50 kobo each. Transcorp has 25.81 billion ordinary shares outstanding on the Nigerian Stock Exchange (NSE).

    Shareholders of the company are scheduled to meet on Thursday March 28, this year to consider and approve the resolutions on the increase in authorised share capital and to empower the board to float a rights issue “in such proportion, at such time, for such consideration and upon such terms and conditions as the directors may deem fit.”

    Transcorp had traded at a high of N1.96 this year.The conglomerate’s market consideration floated between a high and low range of N1.42 and 50 kobo in 2012, before closing the year at N1.05 per share.

    Transcorp Consortium had emerged the highest and preferred bidder for the Ughelli Power Plc under the Federal Government’s power privatisation exercise. Transcorp consortium offered $300 million for the power firm. The Transcorp consortium included companies such as Wood Rock; Symbion Power LLC, USA; Medea Development; PSL Engineering and Control and Thomassen Services and Contracting Company.

    Often cited in relation to the boom in the telecoms 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 privatisation to government’s transformation agenda confer enormous advantages on the power companies.

    Chairman, Transcorp, Mr Tony Elumelu, also said the conglomerate has started the execution of its expansion plans to fully utilise the massive unutilised land on its Transcorp Hilton Abuja site and roll out new hotels across major economic centres in Nigeria, such as Lagos and Port Harcourt.

    According to him, the conglomerate has taken several significant steps in its key sectors of agri-business, energy and hospitality – that would no doubt see Transcorp taking its rightful place as a key player in the economic development and transformation of Nigeria.

    Besides, Transcorp had recently caused the revision of 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 indigenous oil and gas upstream company with production.

    Interim report and accounts of Transcorp for the period ended September 30, last year had shown that the conglomerate continued to optimise its profitability.

    Profit before tax stood at N1.7 billion in September last year as against N922.7 million recorded in comparable period of 2011. Profit after tax stood at N1.50 billion in 2012 compared with a net loss N77.22 million in comparable period of 2011.

    The conglomerate’s operating expenses had dropped from N778 million in 2011 to N689.7 million in 2012 as it continued to reap from cost optimisation strategy. Total assets grew by 19.44 per cent from N23.32 billion in 2011 to N27.85 billion in last year.

     

  • Transcorp, GE sign deal on power

    Transcorp, GE sign deal on power

    Transnational Corporation of Nigeria Plc (Transcorp) and General Electric (GE), yesterday signed a framework agreement to collaborate in addressing the infrastructural needs of Nigeria, with emphasis on the power and transportation sectors.

    In a statement, GE, confirmed its commitment to facilitate the generation of 10,000MW of additional power in Nigeria over the next decade in line with its existing agreement with the Federal Government of Nigeria, signed in March 2012.

    Transcorp Ughelli Power Plc (TUP), a subsidiary of Transcorp, is a publicly quoted and diversified conglomerate with strategic investments in the hospitality, agribusiness and energy sectors. TUP won the privatization bid for 100 per cent acquisition of the Ughelli power plant.

    The framework agreement, which was signed according to the statement, following a closed door meeting with GE’s global chairman, Jeffrey Immelt, and Transcorp Chairman, Tony O. Elumelu,  will enable both firms explore a partnership for the refurbishment and expansion of the Ughelli power plant in Delta State.

     

  • Will power project redeem Transcorp’s image?

    Will power project redeem Transcorp’s image?

    The recent announcement of Transnational Corporation of Nigeria (Transcorp) Plc as one of the successful bidders for power generation companies being privatised by the Federal Government may further consolidate the conglomerates recovery, writes Taofik Salako.

    The emergence of Transcorp Consortium as the highest and preferred bidder for the Ughelli Power Plc, one of the five power generation companies under privatisation in the unbundling of the Power Holding Company of Nigeria (PHCN), has seen a spike in demand for the shares of the conglomerate at the stock market. Transcorp consortium had offered $300 million for the Ughelli Power Plc. The Transcorp consortium included companies such as Wood Rock; Symbion Power LLC, USA; Medea Development; PSL Engineering and Control and Thomassen Services and Contracting Company. They had all been prequalified by the NCP. Within the consortium, Transcorp is the dominant Nigerian company and ostensibly the anchor for the consortium. Besides, it probably has the dominant role among the three quoted companies in the entire process.

    With the market agitating for the inclusion of listing on the Nigerian Stock Exchange (NSE) as part of the conditions for the emerging power companies, the red alert for possible windows for wider investors’ participation in the power companies was high.

     

    Changing fortunes?

     

    Another streak of bullish rally would see Transcorp consolidating its position atop the return table at the NSE. Already, with a subsisting year-to-date gain of about 68.4 per cent, the conglomerate has mostly showed strong performance. While Transcorp had recorded a negative year-to-date return of 8.77 per cent or a loss of N1.3 billion within the three months ended March 31, 2012, the second quarter had seen significant capital appreciation as the conglomerate released early fundamentals and forecasts for 2012. At 57 kobo per share, Transcorp had opened this year with a market capitalisation of N14.71 billion but it ended the first quarter with market value of N13.42 billion at 52 kobo per share, around its lowest value per share of 50 kobo. At today’s opening price, Transcorp’s market value stands at about N24.8 billion.

    But it still has a long way to go to redeem its hopes and promises. For most non-insider investors in Transcorp, it has been a long waiting for any form of return or recuperation-cash dividend, bonus share or capital appreciation. Incorporated in 2004, Transcorp was touted as the next frontier of African investment and Nigeria’s investment vehicle in the global economy. Its vision was to become the largest and most successful Africa-based conglomerate while the mission was to drive Africa’s integration into the global economy by becoming a Nigerian-based multi-national conglomerate with between $5 billion and $10 billion annual revenue and market capitalisation of between $30 billion and $60 billion within five to seven years. As a conglomerate, Transcorp’s interests span agriculture, energy, real estate, hospitality and trade and commerce. All these were woven around enticing returns to shareholders.

    More than five years after it raised several billions of naira from investors with a promise to be the pride of shareholders, Transcorp has still yet to find neither the fundamental stability nor the technical appreciation to deliver any commensurate return. After a railroaded application and waiver that exempted Transcorp from the required minimum operational years and audited accounts, the conglomerate was listed in November 2006. The share price leapt from a low of N6 per share to close the year at a high of N9.71. However, realities soon set in. Transcorp closed 2007 at N3.14 per share, seven kobo above its lowest market consideration of N3.07 during the period. Thus, rather than the high hopes of a global multinational return, Transcorp returned full-year loss of 67.7 per cent to shareholders in its first full year on the stock market.

    By the time the capital market caught the cold from global financial and economic crises and domestic assets bubble in 2008, Transcorp had stripped to nominal value. In 2010, the conglomerate spiraled from a high of 57 kobo to close at a low of 50 kobo. In 2011, the company traded within a range of a high of N1.82 and a low of 50 kobo and subsequently closed at 57 kobo per share. But for most part of this year, the stock has shown tendency towards the bull rather than the bear. Although it had slumped to a low of 50 kobo, it has largely hovered around 100 kobo mark in the past six months.

     

    The fundamentals

     

    Transcorp recovery is also related to changes in the fundamentals of the company. While its performance on the secondary market mirrored its historic false start, the resurgence is also an indication of the prospective yields, especially given the low consideration of the stock. Transcorp had posted a loss of N9.1 billion within the eight-month period ended December 2006. In 2007, loss after tax stood at N8.93 billion while investors contended with net loss of N6.70 billion in 2008. It broke the cycle in 2009 with a net profit of N1.2 billion.

    But recent audited and interim fundamental reports of the conglomerate have shown stable and reassuring positive outlook, allaying fears that had built up over years of mindboggling losses. Audited report and accounts for the year ended December 31, 2011 showed that turnover rose from N13.93 billion in 2010 to N14.08 billion in 2011. Profit before tax and exceptional Item stood at N3.5 billion as against N4.1 billion in 2010. After exceptional item, profit before tax dropped from N6.91 billion to N3.5 billion. Profit after tax closed 2011 at N4.67 billion as against N5.39 billion in 2010.

    Unaudited report for the first quarter ended March 31, 2012 showed appreciable improvement in profitability, raising prospects for shareholders’ earnings this year. While turnover dropped marginally from N663.81 million in first quarter 2011 to N514.84 million by first quarter of 2012, profit before tax closed the first three months of 2012 at N610.12 million compared with N399.07 million in comparable period of 2011. Profit after tax also improved from N319.26 million to N518.61 million.

    By the second quarter ended June 30, 2012, profit before tax had romped to N1.05 billion as against N684.01 million in comparable period of 2011. Profit after tax also increased to N939.93 million as against N547.21 million in corresponding period of 2011. However, total revenue dropped from N1.25 billion to N1.25 billion, indicating the fact that the bottom-line was driven majorly by financial management than operations. Net finance income, after deducting finance expenses, stood at N747.12 million in 2012 as against deficit of N127 million in 2011.

    In recent time, the board of the company estimated that profit after tax would be about N1.51 billion by the third quarter ended September 30, 2012. With total income expected at N2.66 billion, profit before tax was projected at N1.77 billion for the period.

     

    Hopes on the horizon?

     

    Increasingly positive fundamentals are expected to redirect investors’ perceptions about the prospects of the conglomerate. Just as the emergence of the conglomerate as a core investor in a power generation company. 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 privatisation to government’s transformation agenda confer enormous advantages on the power companies.

    Transcorp is also pushing for growth on other frontiers. Speaking recently on prospects of the conglomerate, chairman, Transcorp, Mr. Tony Elumelu, said the conglomerate has commenced the execution of its expansion plans to fully utilise the massive unutilised land on its Transcorp Hilton Abuja site and roll out new hotels across major economic centres in Nigeria such as Lagos and Port Harcourt.

    According to him, the conglomerate took several significant steps in its key sectors of agri-business, energy and hospitality – that would no doubt see Transcorp taking its rightful place as a key player in the economic development and transformation of Nigeria. He outlined that Transcorp’s agribusiness subsidiary, Teragro Ltd, has the annual capacity to process 26,500 metric tonnes of oranges, mangoes and pineapples, turning them into juice concentrate that will be supplied to ready-to-drink juice manufacturers in Nigeria and beyond.

    “This plant will contribute tremendously to increased employment, the utilisation of local produce, as well as serve as a domestic supply substitute for indigenous manufacturers. I am excited and optimistic about Nigeria’s coming of age. Now is the time to become fully engaged in transformational investments that create economic prosperity and social wealth by increasing employment and enhancing the quality of life for all Nigerians,” Elumelu said.

    President, Transcorp, Mr Obinna Ufudo, said the company has fully embraced and enthroned the highest level of global best practices and governance standards in our operations and businesses.

    “Our major priorities now are creating value for our stakeholders as well as making profits for our shareholders, and we believe very strongly that the foundation that we are laying, and our hard work, will lead to dividends being paid by the end of this financial year,” Ufudo said.

    Besides, Transcorp had recently caused the revision of 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.

    The company is optimistic that the power generation deal would be a win-win situation for Nigerian consumers and its investors. “We are going to let Nigerians know that a Nigerian company can lead a foremost Nigerian sector,” Ufudo enthused shortly after Transcorp was declared a winner.

    Such a win as the leader in the much-needed electricity sector will surely make Transcorp a winning stock. There however, still remain points of caution. A similar announcement of preferred bidder for the Nigerian Telecommunications Limited (NITEL) proved to be a mirage, with the telecoms company still writhing in the pangs of the inconclusive deal. Transcorp was also a party in the NITEL saga. But then, leadership has changed at the conglomerate and the financial clout of the new board appears adequate to cover a $300 million deal. Even as it finalises the power deal, there appears to be more wind in the wing to propel Transcorp to a new high.

  • Transcorp targets N2b net profit

    Transcorp targets N2b net profit

    Transnational Corporation of Nigeria (Transcorp) Plc could make a net profit of about N2.01 billion this year, according to latest estimates by the board of the conglomerate.

    Forecasts for the 12-month period ended December 31, 2012 indicated that the company expected to make profit before tax of N2.17 billion from total income of N3.6 billion. After taxes, net profit is expected to be N2.005 billion.

    The forecasts indicate possible earnings per share of 7.8 kobo.

    Speaking recently on the outlook for the company, chairman, Transnational Corporation of Nigeria, Mr. Tony Elumelu, said the conglomerate would optimize its idle assets and invest in new facilities and businesses to ensure stable growth and returns to shareholders.

    He said the company has commenced the execution of its expansion plans to fully utilise the massive unutilised land on its Transcorp Hilton Abuja site and roll out new hotels across major economic centres in Nigeria such as Lagos and Port Harcourt.

    He added that the conglomerate has also signed a partnership agreement with Symbion Power, a US-based energy company, to engage in power production venture, which would lead to a significant increase in power production for the benefit of the nation.

    According to him, the conglomerate took several significant steps in its key sectors of agri-business, energy and hospitality – that would no doubt see Transcorp taking its rightful place as a key player in the economic development and transformation of Nigeria.

    He outlined that Transcorp’s agribusiness subsidiary, Teragro Ltd, has the annual capacity to process 26,500 metric tonnes of oranges, mangoes and pineapples, turning them into juice concentrate that will be supplied to ready-to-drink juice manufacturers in Nigeria and beyond.

    “This plant will contribute tremendously to increased employment, the utilisation of local produce, as well as serve as a domestic supply substitute for indigenous manufacturers. I am excited and optimistic about Nigeria’s coming of age. Now is the time to become fully engaged in transformational investments that create economic prosperity and social wealth by increasing employment and enhancing the quality of life for all Nigerians,” Elumelu said.

    In his remarks, president, Transcorp, Mr. Obinna Ufudo, said the company has fully embraced and enthroned the highest level of global best practices and governance standards in its operations and businesses.

    “Our major priorities now are creating value for our stakeholders as well as making profits for our shareholders, and we believe very strongly that the foundation that we are laying, and our hard work, will lead to dividends being paid by the end of this financial year,” Ufudo said.