Transcorp Plc reports Q3 2023 PBT of N7.64 billion

Transnational Corporation Plc (Transcorp) has reported its financial performance for the third quarter of 2023, showcasing both positive and challenging aspects. This renowned conglomerate, as disclosed in its financial statements for the period ending September 30, 2023, demonstrated resilience in the face of economic fluctuations and operational dynamics.

In Q3 2023, Transcorp achieved a profit before tax (PBT) of N7.64 billion, representing a modest 1.8% year-on-year growth when compared to the same quarter in 2022. This positive result speaks to the group’s ability to navigate the complexities of the business environment and generate profits even in the face of challenges.

However, the profit after tax (PAT) for Q3 2023 was N6.63 billion, reflecting a 5.6% decline compared to the N7.03 billion recorded in the corresponding quarter of the previous year. The decline in PAT could be attributed to various factors, including increased finance costs and rising operating expenses.

On a more positive note, Transcorp reported a remarkable 37.6% increase in revenue for Q3 2023, with a total of N45.9 billion. This growth is significant, considering that in Q3 2022, the revenue was at N33.36 billion. This increase in revenue is an encouraging indicator of the group’s ability to capture new opportunities and expand its market presence.

The performance for the first nine months of 2023, a period that ended on September 30, is equally noteworthy. Transcorp achieved a total revenue of N128.03 billion, marking a substantial 33.02% growth compared to the same period in 2022 when the revenue was N96.25 billion. This growth demonstrates the group’s commitment to sustainable business expansion and strategic growth.

Key Highlights Q3 2023 vs. Q3 2022:

1. **Revenue**: The group’s revenue in Q3 2023 reached N45.90 billion, a remarkable increase of 37.6% compared to Q3 2022.

2. **Gross Profit**: Transcorp recorded a gross profit of N21.02 billion, reflecting a robust growth of 34.8% year-on-year.

3. **Operating Profit**: The operating profit for Q3 2023 was N12.80 billion, indicating a 15.9% year-on-year growth.

4. **Profit before Tax**: Transcorp achieved a PBT of N7.64 billion, representing a slight 1.82% year-on-year increase.

5. **Profit after Tax**: The PAT for Q3 2023 was N6.63 billion, which is a 5.6% decline compared to the same period in 2022.

6. **Total Comprehensive Income**: The group reported a total comprehensive income for the period of N8.83 billion, showing a robust 29.7% year-on-year growth.

7. **Earnings per Share**: The earnings per share (EPS) for Q3 2023 stood at N9.53, reflecting a 22.2% year-on-year growth.

8. **Total Assets**: Transcorp’s total assets for the period were N479.83 billion, marking an 8.4% year-to-date increase.

**Insights**:

The decline in Profit After Tax (PAT) for Q3 2023 can be attributed to a notable increase in finance costs. Compared to the same quarter in 2022, finance costs rose by 64.1%, significantly impacting the group’s bottom line. Managing and optimizing these finance costs will be crucial in ensuring sustained profitability.

Additionally, the group experienced a substantial increase in operating costs. These costs surged from N4.55 billion in Q3 2022 to N8.22 billion in Q3 2023, marking an 80.75% year-on-year rise. This surge in operating costs emphasizes the importance of cost management and operational efficiency in Transcorp’s ongoing operations.

Transcorp operates across four key segments, which are:

1. **Agro-Allied (Teragro Commodities Limited)**: This segment focuses on agricultural and allied activities, contributing to the group’s diversified portfolio.

2. **Power (Transcorp Power Limited)**: Transcorp Power Limited plays a crucial role in the energy sector and remains a significant contributor to the group’s revenue.

3. **Oil and Gas (Transcorp Energy Limited and Transcorp OPL 281 Limited)**: These entities operate in the oil and gas sector, contributing to the group’s energy and natural resources activities.

4. **Hospitality (Transcorp Hotels Plc)**: The hospitality segment adds to the group’s profile as a diversified conglomerate with interests in various sectors.

During the nine months ending September 30, 2023, Transcorp Power Limited emerged as the most substantial revenue contributor to the group, with a revenue of N98.18 billion, accounting for 76.7% of the total revenue. Following closely, Transcorp Hotels Plc contributed N29.85 billion, representing 23.3% of the total revenue. Notably, there was no revenue contribution from the other segments during this period.

Transcorp’s financial performance in Q3 2023 reflects a mix of growth, challenges, and opportunities. The group’s ability to sustain revenue growth is commendable, while managing finance costs and operational expenses will be essential to ensuring consistent profitability. With a diverse portfolio and a strategic presence in multiple sectors, Transcorp remains a significant player in Nigeria’s corporate landscape.