Power generating companies listed on the floor of the Nigerian Exchange have seen tremendous change in their financial fortune in the half year ended June 30, 2024. Analysis of the financial reports of Geregu Power Plc and Transcorp Power Plc showed that a surge was recorded both in revenue and profit which is linked to a recent hike in electricity tariff in the country. BAMIDELE FAMOOFO reports.
Transcorp Power Plc and Geregu Power Plc are the only two electricity generating companies listed on the floor of the Nigerian Exchange Limited, and they have witnessed a noticeable change in their financial fortunes in recent times.
Analysis of their half-year financial figures made available to investors and other stakeholders in the stock market by The Point showed that both Gencos recorded over 100 per cent growth in revenue and net profit in the review period that ended June 30, 2024.
The two Gencos posted total revenue of N216.1 billion in the half-year period ended June 2024 compared with N90.6 billion posted in the same period in 2023.
The growth represents a year-on-year increase of 138.5 per cent. On the average, revenue stood at N108 billion.
Net profit by both Gencos in the half year 2024 stood at N56.9 billion, from N19.1 billion posted in the half year 2023, which represents a year-on-year growth of 198 per cent. On the average, profit stood at N28.5 billion.
The Nigerian Electricity Regulatory Commission, in April, ordered an upward review of electricity tariffs.
Accordingly, power distribution companies are allowed to raise electricity prices to N225 ($0.15) per kilowatt-hour, from N68. It was however reviewed downward to N206 per kilowatt.
“The two Gencos posted total revenue of N216.1 billion in the half-year period ended June 2024, compared with N90.6 billion posted in the same period in 2023”
HOW THEY STAND
Geregu Power Plc
Geregu Power’s half-year earnings more than doubled to N20bn.
Geregu Power Plc, a listed power generation company in Nigeria, has reported a 148.4 per cent rise in its after-tax profit in the first half of 2024.
According to the power generating firm’s latest unaudited financial statement, its after-tax profit rose to N20 billion in the first half of the year, from N8.05 billion reported in the same period of 2023.
The company’s revenue for the period grew by 132.9 per cent to N80.6 billion, driven by higher proceeds from energy sold (N50.8 billion) and capacity charge (N29.6 billion).
However, impairment losses on trade receivables also increased significantly to N6.08 billion, from N1.9 billion in the corresponding period of 2023.
Impairment loss on trade receivables is a non-operating expense that is recorded when a company expects to receive less cash than the carrying value of its trade receivables.
Trade receivables are amounts owed to a company by its customers for goods or services that have been sold on credit.
Administrative expenses amounted to N5.04 billion in the period under review from N2.41 billion recorded in the same period of 2023.
Of the administrative expenses, personnel cost gulped N1.2 billion of the total amount, followed by repair and maintenance of machinery and plant with N579 million compared to only N89 million a year ago.
The company’s other income declined by 82 per cent to N1.96 million, from N11.3 million a year ago. This was a result of the firm’s ability to generate foreign exchange gains during the period under review.
Finance costs during the period declined by 21 per cent to N4.85 billion, from N6.14 billion in the same period in the previous year.
The statement disclosed that the decline in finance cost was on the back of a 40 per cent decline in the cost of borrowed funds as Geregu’s loan appetite declined by 13 per cent.
The interest expense on the bond issued to secure the power plant and the money it spent to service bank loans together amounted to N1.9 billion and N2.9 billion, respectively.
The company that has crossed one trillion market capitalisation on NGX share price rose to N1000 as of June 30 and its earnings per share rose by 148.7 per cent to N8.01 from N3.22.
The power generating firm’s total assets rose to N207 billion in the first six months from N155 billion in the same period of 2022, while total liabilities rose to N162 billion from N118 billion.
Its shareholders fund during the reviewed period also rose to N45 billion from N37 billion.
The company’s cash flows for the six months of 2024 were as follows: Net cash from operating activities amounted to a negative N24.8 million, from N30.6 billion recorded in 2023; net cash generated from investing activities amounted to N4.2 billion from N3.7 billion recorded in 2023 as a result of an increase in interest received.
Net cash used in financing activities recorded amounted to a negative N30.6 billion from N41.6 billion generated in 2023.
Cash and cash equivalent for the period decreased to N43 billion from N44 billion recorded in the same period of 2023.
Speaking to shareholders at the 12th Annual General Meeting in Lagos, Chairman, Geregu Power, Femi Otedola stated that the company remains cautiously optimistic despite the challenges faced in the previous year.
“In 2024, Geregu Power aims to align our business operations with the global trend toward affordable, clean and efficient energy systems. This involves incorporating renewable energy sources into our power generation portfolio, a move that not only aligns with our sustainability goals but also positions us to capitalise on emerging market opportunities.
“Our commitment to innovation and sustainability, along with our strategic initiatives, positions us well to navigate the challenges and seize the opportunities that lie ahead,” he said.
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.
According to a publication by Billionaires Africa, Geregu Power Plc, founded in 2006, began supplying electricity to Nigeria’s national grid in 2007. Its 435-megawatt (MW) capacity power plant contributes to the nation’s energy needs.
In 2013, a consortium led by Femi Otedola’s Amperion Power Distribution Company Limited acquired Geregu Power. The consortium included Calvados Global Services Limited and State Grid Shanghai Municipal Electric Power Company, the world’s largest utility.
Last month, Geregu Power Plc signed a Memorandum of Understanding with Siemens Energy to jointly develop solutions for capacity expansion at the Geregu 1 power plant.
“The deal aims to triple Geregu’s total capacity from 435 to 1,200 megawatts (MW) as well as ensure sustainable, resilient, and efficient power generation while safeguarding the longevity of assets, all aimed at supporting the growth and sustainability of the Nigeria Electricity Supply Industry (NESI),” the company disclosed in a statement.
TRANSCORP POWER PLC
Transcorp Power grows revenue by 142% to N135.4bn in H1 2024.
Transcorp Power Plc (Transcorp Power), one of the power subsidiaries of Transcorp Group reported a total revenue of N135.4 billion in H1 2024, representing a 142 per cent increase from N55.9 billion in H1 2023, while profit before tax grew by 214 percent to N50.9 billion.
According to the company’s unaudited results, the profit before tax also grew by 214 per cent to N50.9 billion, compared to N16.2 billion in the previous year, and the total assets grew by 45 per cent to N322.9 billion as of June 30th, 2024, up from N223.3 billion at the beginning of the year.
“Shareholders’ funds increased by 64% to N94.6 billion as of June 30th, 2024, up from N57.8 billion as of 31st December 2023, boosted by retained earnings,” it stated.
Commenting on the company’s performance, Peter Ikenga, MD/CEO of Transcorp Power, attributed the feat to the company’s strategic vision and relentless pursuit of excellence.
“This positive performance across key indicators emphasizes our agility and ability to navigate complex market dynamics effectively. We recognize the criticality of power to unlock the value in our dear country, Nigeria and we remain committed towards our goal of bridging the energy gap in our country. We will continue to execute our maintenance programme and make the necessary investments to increase our power-generating capabilities,” he said.
Emmanuel Nnorom, Chairman, Board of Directors noted that the Company’s impressive results in the first half of the year underscored its resilience and operational excellence while navigating the complex power landscape.
He added, “The interim dividend of N1.50 is a testament to our commitment to create value and spread wealth to all our shareholders. The half-year performance also further reinforces our consistent upward growth trajectory year on year and confidence that Transcorp Power will continue to deliver exceptional performance in the future. Our shareholders are assured of a sustained high level of performance and superior returns for their investment in Transcorp Power.
“Transcorp Power, which was listed on the Nigerian Exchange (NGX) earlier this year, has continued to show impressive growth, attaining a market capitalisation of N2.8 trillion up from its listed market value of N1.8 trillion.
“With a clear strategic direction and a strong foundation, Transcorp Power is a leading power generation company and is paving the way for the future of energy in Nigeria and beyond. The company remains focused on its mission to provide dependable power solutions, driving economic progress and improving the quality of life for millions.”
Transcorp Power Plc is one of the electricity-generating subsidiaries of Transnational Corporation Plc (Transcorp Group), a leading, listed African conglomerate. The company is creating value across Nigeria and driving economic growth, demonstrating its mission to improve lives and transform Africa.
