Geregu Power N2Trn Gain in 17-Month Beats Expectations
Geregu Power Plc has price gained more than 33% to close at N901, according to data from the Nigerian Exchange (NGX). The company has continued to outperform the equities market following its earnings release for 2023.
In October 2022 the power-generating company made an entry into the stock market at N100 per share. Its market capitalisation was N250 billion, spread over a total share outstanding of 2.5 billion units. Since it became a listed company, the company has seen a more than N2 trillion increase in market valuation.
Analysts said investors’ sentiment has continued to drive the company’s rerating which took its market capitalisation to N2.252 trillion on Friday. The local bourse has become a money-spinning machine for many local investors who seek to protect their naira assets by taking risks.
It is not immediately clear who is ramping up the company shares, though MarketForces Africa observed a series of large unusual volume transactions in the equities market last week. According to its disclosure about directors dealing in the company’s shares, Geregu Power told investors that Amperion Power Distribution Company Limited, its majority shareholder acquired 12 million shares at N568 on January 31, 2024, in a cross deal stock sale.
In its audited financial statement for 2023, Geregu Plc’s profit after tax grew by about 58% to N16.05 billion. The company’s bottom line was supported by a surge in foreign exchange gains to N502.3 million during the year and increased revenue generation.
Looking into the New Year, management expects earnings to continue to pop up. In a statement submitted to the Nigerian Exchange signed by its chief executive Akin Akinfemiwa and Chief Finance Officer Ganiyu Adisa, Geregu Plc expects to declare N5.56 billion as profit in the first quarter of 2024.
This comes in contrast to its cash flow from operation which is expected to settle at N590 million in the period. Also, the company said it expects operating cash flow before working capital changes to settle at N9.79 billion in Q1-2024. Details from the forecast document showed that the company expects a profit of less than N6 billion (about 18% of turnover) amidst an expectation that revenue would be over N31 billion in the same period.
The company forecasts its revenue to hit N31.242 billion, out of which it expects to offset N16.759 billion as costs of sales. This would leave the power-generating company with N14.482 billion as gross profit. The company’s administrative expense is expected to gulp N5.4 billion.
Net finance cost of about N800 million is expected to stand between the company’s operation profit of about N9.1 billion in the period and its pretax profit of N8.3 billion. Geregu Power estimated about N2.4 billion as tax provision for the period, reducing its profit for the period to N5.56 billion.
Femi Otedola, Chairman, Geregu Plc divested from the oil marketing business to focus on the power generation and distribution business. #Geregu Power N2Trn Gain in 17-Month Beats Expectations Africa Countries Top World’s 20 Fastest-Growing Economies in 2024
