By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE)-Nigeria’s top tier conglomerate, Transnational Corporation of Nigeria Plc on Wednesday said as part of its continued effort to enhance shareholder value, the group board has recommended to shareholders for approval of a bonus issue of 1 ordinary share of 50 Kobo for every 20 ordinary shares of 50 Kobo each held.
A review of the period ended December 31, 2015 shows that pretax profit dropped 57.1 percent to N3.32 billion from N7.73 billion recorded a year ago.
In the same vein, profit after tax (PAT) declined 38.5 percent to N2.03 billion from N3.30 billion posted the same period of 2014.
Revenue of the conglomerate climbed down marginally by 1.4 percent to N40.75 billion from N41.33 billion declared in the corresponding period of 2014, Transcorp said in a filing with the Nigerian Stock Exchange (NSE).
According to the report, the company grew its balance sheet during the year. Total asset increased by N32 billion to N202.9 billion, compared to N170.8 billion as at 2014 FY. Increase in Plant Property and Equipment reflects the impact of expansion projects undertaken by Transcorp Hotels Plc. specifically the upgrade of Transcorp Hilton Hotel Abuja and developments of Transcorp Hilton Ikoyi and Port Harcourt.
Tax payable stood at N1.3 billion following the corporate restructuring of the Group with the successful merger of Transcorp Ughelli Power (TUPL) and Ughelli Power Plc (UPP) as shareholders funds stood at N87.5 billion in the review period.
The group revenue was affected by the non-implementation of the Multi-Year Tariff Order (MYTO) 2015 in the Power sector and impacts of forex devaluation on the cost of gas and debt service. Also, the merger of Transcorp Power Ughelli Limited (TUPL) and Ughelli Power Plc (UPP) was successfully completed and the surviving entity renamed as Transcorp Power Limited. The objective of the merger was to eliminate duplicated costs and ensure greater efficiency, the conglomerate noted.
Despite the slow start experienced by the Hospitality business in Q1 2015 occasioned by security concerns regarding the March 2015 general elections, it closed strongly in Q4 2015. Transcorp Hotels Plc successfully raised two series (Series I and II) of its N30 billion Medium Term Bond Programme. Series I raised N10 billion over a 7-year term at 16.5 percent per annum (PA). Series II raised N10 billion over a 7-year term at 16.5 percent p.a.
According to Transcorp, the proceeds of the Bond issue is already being applied towards the upgrade of Transcorp Hilton Abuja as well as the development of a Multi-Banquet Conference Centre.
“We displayed relative resilience in 2015 despite various macroeconomic and industry challenges. We continued to maintain top line in 2015 and adapted cost-management measures to keep our administrative expenses within line. Our current expansion agenda within the Hospitality, Oil & Gas and Power sectors will provide the platform for sustainable growth within the medium term. Following recent government intervention in the Power sector, particularly with tariff increase, we expect that a strong growth in our power business in 2016.” The Gas shortages still remain a challenge.
Management will continue to adapt proactive approach to the challenging business environment, adopting our diversified business model, strong corporate governance and excellent execution of identified strategies to drive our growth in the near term,” Emmanuel Nnorom, president/CEO of the company said while commenting on the results.