Transcorp 9M profit drops 11% to ₦111B as power revenue slides
Transcorp's nine-month profit before tax falls 10.5% to ₦111.39 billion, dragged down by a 13.3% revenue decline to ₦357.38 billion. The power business, Transcorp's largest segment, saw revenue drop 7.8% to ₦331.5 billion, with energy sent out revenue alone falling ₦55.79 billion. Hospitality revenue also slipped 2.6% to ₦69.46 billion. Profit after tax dropped 17.9% to ₦75.09 billion, and earnings per share fell to 429 kobo from 534 kobo.
Despite weaker earnings, the balance sheet expanded. Total assets grew 13% to ₦1.13 trillion, driven by higher receivables (₦590.18 billion) and new debt securities investments (₦45.56 billion). Borrowings surged 75% to ₦131.82 billion, mostly long-term debt rising to ₦105.65 billion. The bright spot: operating cash flow jumped to ₦95.65 billion from just ₦10.89 billion a year ago, pushing cash holdings up 110% to ₦45.96 billion.
Transcorp shares closed at ₦36.10 on Monday, down 20.5% year-to-date from ₦45.40. The market is pricing in the revenue pressure from power generation, but the cash flow improvement and deleveraging of short-term debt (down to ₦26.17 billion) suggest financial discipline underneath the headline numbers.
If you hold Transcorp shares, do you see the cash flow turnaround as a stronger signal than the profit decline, or is the power sector revenue trajectory the real story?