The President/CEO of Transnational Corporation of Nigeria (Transcorp) Plc Mr. Valentine Ozigbo, yesterday projected improved performance for the conglomerate in the remaining quarters of 2019, in spite of the inclement operating environment.
Transcorp Plc recorded a decline in its half year revenue and profit before tax to N37.762 billion and N5.05 billion respectively, due to gas and transmission challenges faced by the power business, which are being addressed by the management.
But speaking at Transcorp Plc’s half year Analysts Parley for financial analysts and investors, which was attended by chief executive officers (CEOs) of its subsidiaries and other senior management staff of the company, Ozigbo presented the financial results for the half year ended 30 June 2019.
“Our half year results were affected by severe gas shortages as well as transmission and other technical challenges in our power business, especially during the first quarter of the year when supply dropped from an all year peak of 150 mmscf/d to an average of 89 mmscf/d. We are happy with growth in our hospitality business as it affirms the decision we made to invest $100 million in upgrading the Transcorp Hilton Abuja,” he said.
Ozigbo, disclosed that with the support of the board, management is implementing a number of action plans aimed at addressing the gas supply challenges in a sustainable manner.
“These include the activation of a recently reviewed Gas Supply and Aggregation Agreement as well as the optimisation of the opportunities embedded in it, and the exploration of additional affordable gas supply sources. Actualisation of these as well as improvement in transmission and market payment for electricity generation will drive recovery in the second half of 2019. This is in addition to even more significant contributions from our hotel business, which is expected to sustain the increased occupancy rates seen in the first half of the year,” he said.
He assured all stakeholders that through a mix of operational efficiency and strategic business development, “we are confident of a more positive third quarter (Q3) performance and we remain committed to our value-creating purpose of improving lives and transforming Nigeria.”
Analysts present at the event expressed their appreciation of the detailed presentation and clarification provided by the Transcorp team.
Transcorp Consortium, with its bid price of N105.3 billion ($293 million), recently emerged the preferred bidder for Afam Genco, comprising Afam Power Plc and Afam Three Fast Power Limited, after a highly competitive bid conducted by the Bureau of Public Enterprises.
“Having attained this laudable milestone, we expect a significant growth in the company’s performance in the future upon full takeover of the new plant. This brings us closer to achieving our aspiration of providing power to one out of every four Nigerians,” Ozigbo said.