Kayode Tokede
As consumer demand for electricity continued to grow, Geregu Power Plc reported its highest revenue growth in 2023 financial year that translated into a significant increase in profit and dividend payout to shareholders who invested in the company.
The electric power generating announced N82.91billion revenue in 2023, representing an increase of 74.11 per cent from N47.62billion reported in the 2022 financial year.
The growth in revenue can attributable to 79per cent growth in energy sold to N31.1 billion in 2023 from N 17.37billion in 2022 and 74per cent increase in capacity charge to N31.11billion in 2023 from N17.37billion in 2022.
In the last five years, the company that was incorporated in 2006 and listed on Nigerian Exchange Limited (NGX) 2022 announced N82.91billion in 2023 and the lowest revenue was N47.62 billion in 2022.
In the 2023 financial year, it declared N40.25billion cost of sales, an increase of 64.4per cent from N24.48billion in 2022, driven by N38.09 billion gas supply and transportation reported in 2023 from N22.22billion in 2022 and N2.15billion plant depreciation reported in 2023 from N2.25billion announced in 2022 financial year.
Consequently, cost of sales/revenue dropped to 48.54per cent in 2023 from 51.4 per cent in 2022.
This positions its gross profit to N42.66billion in 2023, a growth of 84.4per cent from N23.14billion reported in 2022.
The company saw its non-core business income at N502.3million in 2023 from N153.25million in 2022 and it is due to the foreign exchange gain, a policy introduced by Central Bank of Nigeria (CBN) to unify the foreign exchange market last year.
Geregu Power announced an impairment reversal of N955.9million from N3.73billion impairment loss on financial assets in 2022.
Administration expenses grew significantly to N12.98billion in 2023 from N4.75billion reported in 2022, driven by N8.37billion repair and maintenance of plant and machinery in 2023 from N212.3million reported in 2022 and N2.46billion personnel cost in 2023 from N2.14billiion in 2022.
The hike in the inflation rate and the unification of the foreign exchange market played an important role in the company’s growth in administrative expenses.
In terms of finance, the company announced N7.8billion finance income in 2023 from N7.67billion in 2022, while finance cost stood at N14.55billion in 2023 from N7.3billion in 2022.
The 1.62 per cent growth in finance income is on the backdrop of N6.12billion interest income on bank deposits in 2023 from N2.38billion in 2022 and N1.67billion interest income on related party receivables from N5.29billion in 2022.
For finance expenses, it announced N4.91billion interest expenses on borrowings in 2023 from N4.84billion in 2022, while interest expenses on bond increased to N5.9billion in 2023 from N2.48billion in 2022.
In addition to finance expenses, the company in 2023 financial year announced N3.7billion discount on trade receivables.
Profit generation in 2023
The power-generating company announced N24.3billion profit before tax in 2023, representing an increase of 61 per cent from N15.1billion reported in 2022. In 2021, it announced N29.51billion profit before tax, the highest so far.
After a N8.34 billion tax expenses, the company announced N16.05billion profit, an increase of 57.82 per cent from N10.17billion in 2022.
Following improved profits, the management of Geregu Power recommended the payment of N8.00 per share dividend payout to shareholders. This translates into N20billion dividend in the 2023 financial year.
The firm has 2.50 billion units of shares.
The Chairman of the firm, Femi Otedola, who holds 1,245 units directly and 1,965.979,283 indirectly through Amperion Power Distribution Limited would rake in N15.28 billion as a dividend.
Geregu Power was listed N100 per share by introduction and it has increased to N675.9per share as of February 9, 2024 on NGX.
Geregu Power’s Earning Per Share (EPS) (N/per share) increased to N6.42 per share, representing an increase of 57.74 per cent from N4.07 per share reported in 2022.
Balance sheet
Highlights from statement of financial position revealed that Geregu Power’s total assets increased to N182.04billion in 2023 from N174.03biillion in 2022. The breakdown of total assets revealed that non-current assets closed 2023 at N36.35billion from N38billion in 2022, while current assets increased to N145.69billion in 2023 from N136.03billion in 2022.
Cash and cash equivalents contributed N70.26billiion to current assets in 2023 from N51.63billion in 2022.
As for total liabilities, Geregu Power declared N136.89billion in 2023 from N124.93billion in 2022.
In addition, the company announced N45.15billion shareholders funds in 2023, representing a decline of 8.04 per cent from N49.10billion in 2022.
Conclusion
Geregu Power became the first listed company on the Nigerian Exchange Limited (NGX) to declare audited full year ended December 31, 2023 result and accounts with impressive outcomes in key financial parameters.
The company is principally engaged in the business of electric power generation and sale of electricity power through the National Grid of the Transmission Company of Nigeria (TCN) to the Nigerian Bulk Electricity Trading Plc (NBET).
Geregu Power is one of Nigeria’s leading GenCos contributing to nearly 10 per cent of the nation’s total electricity generation.
Equipped with three Siemens gas-fired turbines, Geregu Power boasts an impressive total installed generating capacity exceeding 435 MW. In practice, the power plant consistently generates between 260 MW and 270 MW of electricity.
As part of its capacity expansion efforts, Geregu Power is in the process of acquiring an additional plant, Geregu Power Plant II, a 434MW gas-fired power project to boost power production in the country.
The power generation company registered and domiciled at Itobe – Ajaokuta Express Road, Ajaokuta, Kogi State.
The Geregu Power Plant was constructed by the Federal Government of Nigeria and commissioned into service on the 16th February 2007 to generate electric power and supply to the National Grid managed by the TCN.
The Plant is owned and operated by Amperion Power Distribution Company Limited holding an 80per cent stake and 20per cent retained by Federal Government of Nigeria (jointly held by Bureau of Public Enterprise and Ministry of Finance Incorporated).
