By Aliyu Galadima
Transcorp Hotels Plc has reported a profit before tax ,PBT, of N22.613 billion for the year ended December 31, 2024, marking an impressive 138.48% year-on-year ,YoY, growth.
The company has declared a final dividend of N0.64 per share, bringing the total dividend for the year to N0.74, including the N0.10 interim dividend previously paid.
According to the audited financial statements reviewed by Nairametrics, Transcorp Hotels’ revenue surged by 69.18% YoY to N70.134 billion, up from N41.456 billion in the previous year.
Key highlights ,2024 vs 2023 FY ,
Gross earnings: N70.134 billion +69.18% YoY
Cost of sales: N20.415 billion +74.93% YoY
Gross profit: N49.720 billion +66.93% YoY
Operating expenses: N29.034 billion +68.24% YoY
Operating profit: N26.029 billion +98.03% YoY
Finance cost: N4.011 billion +2.74% YoY
Profit after tax: N14.896 billion +138.18% YoY
Earnings per share: N1.46 +143.33% YoY
Cash and cash equivalents: N8.596 billion -4.27% YoY
Total assets: N140.696 billion +11.58% YoY
Total borrowing: N16.085 billion -22.12% YoY
Shareholders’ funds: N80.519 billion +20.54% YoY
Emmanuel Nnorom, Chairman of Transcorp Hotels, in his comments, highlighted the Company’s commitment towards maximizing shareholder value.
“We remain deeply committed to enhancing shareholder value and delivering strong returns to our investors, ensuring that Transcorp Hotels continues to set the standard for hospitality excellence. The hospitality sector continues to be a vital contributor to Nigeria’s economy, and we are proud of Transcorp Hotels’ role in shaping the industry’s future”.
Building on this, Managing Director/CEO Uzo Oshogwe emphasized the company’s focus on innovation, exceptional service, and sustained growth despite economic challenges.
“Thanks to the dedication and passion of our teams, 2024 was a year of strong growth and significant milestones. Despite inflation and other macroeconomic challenges, we remain focused on delivering outstanding hospitality experiences, expanding our offerings, and implementing a strategy that unlocks the full potential of our business for all stakeholders”.
The impressive growth in pre-tax profit was driven by a strong increase in revenue, primarily from room sales, and a significant rise in other operating income, fueled by substantial foreign exchange gains.
Room sales revenue grew by 70%, contributing 65% of total revenue, while foreign exchange gain surged by 392% to N4.585 billion in 2024, accounting for 85% of other operating income.
Although the cost of sales grew faster than revenue, the gross profit margin remains strong at 70.89%.
Room sales, with an 84.5% margin, remain the most profitable segment, while food & beverages, at 42.9%, operate with tighter margins.
Operational expenses increased, with energy costs contributing to it. Energy expenses surged from N2.425 billion in 2023 to N4.763 billion, reflecting a notable rise.
Total assets grew by 11.58% to N140.696 billion, reflecting continued business expansion.
Total borrowings declined by 22.12%, reducing financial leverage. Interest expenses on borrowings fell 10.21% YoY to N2.798 billion, improving the interest coverage ratio to 9.30x from 4.22x in 2023, indicating that operating profit comfortably covers interest expenses.
Shareholders’ funds rose by 20.54% YoY, driven by strong earnings growth and retained earnings, further strengthening the company’s financial position.
Gearing ratio: The Company has over the years built and maintained a healthy debt capacity and creditworthiness. The gearing ratio improved from 17.48% in FY 2023 to 9.30% in FY 2024, due to the consistent principal repayment of third-party loans.
