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Transcorp Power clears $215m loans

Transcorp Power has fully paid off $215 million US dollar loans and will be channeling new forex inflows to finance Capital Expenditure (CAPEX), its Chief Finance Officer, Evans Okpogoro announced yesterday.

Speaking during an investors conference, held for Transcorp Power Plc, he said the loan was fully paid in January this year.

“We are also excited that we have now fully paid off the USD loan in January 2024. We had a balance of $1.6mn from the $215mn syndicate acquisition loan. We had expected the inflow to come in December 2023 to clear off the balance, but the inflow came in early January 2024 and the full and final loan repayment was made January 9, 2024. With this our FCY inflow will now be used to finance our CAPEX,” he said in his presentation.

Also speaking at the event, Managing Director/CEO, Transcorp Power, Peter Ikenga, achieving 24-hour power supply will require massive investments across the power value chains including grids and distribution.  He added that achieving the feat will also entail blocking all leakages in the sector.

Ikenga said that the signing of the Electricity Act will further open up the power sector and create more liquidity for its operations. He said an increase in energy delivery will equally impact positively on the sectoral revenue.

Continuing, Okpogoro, said Transcorp Power closed financial 2023 with gross earnings of N142 billion representing 57.30 per cent year on year growth. The growth in revenue is driven by a surge in energy delivery and capacity charge, coupled with the expansion into international markets and the international market accounted for 18 per cent of its revenue.

He said: “Transcorp Power continues to sustain and grow its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margins from 44 per cent in the financial 2022 to 49 per cent in financial year  2023, thereby strengthening its pedigree as one of the leading power generation companies in Nigeria. Profit before tax was N52.8 billion representing 84.4 per cent year on year growth. This simply shows and tells the operational efficiency of how we run the plant. Cost to income ratio reduced from 68 per cent financial year 2022 to 63 per cent in the financial year 2023.”

Okpogoro said all efficiency ratios showed that the plant is efficiently managed, and the practice will be sustained to improve in this area to increase the returns to all stakeholders.

“Transcorp Power return on equity of 52.3 per cent and return of assets of 13.5 per cent are very impressive for a utility company and simply tells how effective management is sweating the assets and generating returns to investors. We continue to invest in our assets, as our total assets grew by 32.8 per cent year on year from N168 billion to N223 billion. We expect continues growth in total assets as we plan to invest more CAPEX by bringing back at least additional 250MW in the financial year 2024 to the grid,” he said.

He said that as the company continues to improve its performance, shareholders funds continue to grow by 27 per cent year on year from N38 billion to N58 billion.

“However, going forward the weighted average number of shares would be 7.5 billion as we do not expect any changes to the outstanding number of shares. The board of directors have recommended a dividend of N23.4 billion subject to shareholders rectification at the next AGM. The dividend declared represents a 77 per cent payout ratio which is in line with the dividend policy. Transcorp Power continues to maintain its dividend payment policy year on year. Also, because we are built to last some portion of the profit is plugged back into the business,” he said.

“Earnings Per Share (EPS) for FY 2023 was N92.25 per share. Transcorp Power Plc presents its financial statements in line with the International Financial Reporting Standards (IFRS). IFRS are a set of accounting standards that govern how particular types of transactions and events should be reported in financial statements. The EPS was computed and reported in line with IAS 33 which says earnings per share shall be calculated by dividing profit (the numerator) by the weighted average number of ordinary shares outstanding (the denominator) during the period,” he said.

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