Transcorp Power Budgets $44m to Boost Capacity, Eyes Green Energy
· Paid off $1.6mn loan syndication balance
· Targets 760MW for 2024
· To diversify into renewable energy
· Sets N500bn Revenue Target
Transcorp Power Plc has revealed plan to increase its current power generating capacity to 850 megawatts, management told analysts conference. The company is also seeking diversify interest into renewable energy to close existing gap in the market.
The company which listed its shares recently on the Nigerian Exchange declared a strong spike in top and bottom line as it target a strong revenue growth in the future.
According to its 2023 audited financial statement, Transcorp Power Plc grew revenue by more than 57% year on year to N142 billion. The surge, according analysts, was driven by a boost in energy delivery and capacity charge.
In the period, management said the company revenue was also helped by an expansion into the international market, which contributed 17.8% of Transcorp Power total revenue in the period.
The company’s pretax climbed by more than 84% year on year to N52.8 billion in 2023. Despite unstable price level, its cost-to-income ratio moderated from 68.0% in 2022 to 63.0%, details from its audited results revealed. .
CardinalStone Securities Limited said in its update that Transcorp Power’s overall long-term goal is to cement itself as a leading power company with annual revenue in excess of N500 billion by financial year 3031.
The company revealed plan to recover its plants peak capacity to 740 megawatts by the end of the year through the recovery of the number of units, GTs 8, 9, 14, 18 & 19 within the plant.
In the near term, the plant plans to add 250 megawatts to the total power generation, bringing peak generation to 611 megawatts for 2024, an update from CardinalStone Securities Limited stated.
Management said the power generating company would continue to focus on cost optimization — eliminating waste to minimize any non-value-adding activity. Naira Skids as FX Turnover, External Reserve Decline
In addition, Transcorp Power to analysts it plans to maintain strong relationships with its host communities and continue to deepen strategic partnerships.
According to CardinalStone, the company also intends to deepen its involvement within the West African Power Pool (WAPP) in efforts to improve its cross-border sales to drive growth in the business.
Beyond 2024, management revealed plans to increase capacity to over 850 megawatts. The power generating company said it has launched feasibility study to convert the plant from an open-cycle to a combined-cycle plant, which could potentially add about 200 megawatts to the plant’s capacity.
Transcorp Power told analysts about plans to venture into the renewable energy space, exploring possible opportunities in the solar and hydro space aimed at targeting the underserved population. With epileptic energy supply in the country, analysts noted that between 40% – 45% of the population don’t have access to the national grid.
Management said they are optimistic about Federal Government’s efforts in clearing the backlog of legacy debt to Gencos. CardinalStone said ahis is expected to result in a material decline in its balance of receivables by the end of 2024.
Transcorp Power Plc expects to spend $44 million on capital expenditure projects, noting that the huge amount would be financed by foreign currency inflows from its international sales Management announced that the $1.6 million balance (from the $215 million syndicated loan used to acquire the Ughelli power plant) was fully paid off in January 2024.
Its audited results showed Transcorp Power earnings per share declined to N92.2 from N218.4 in 2022, reflecting an increase in the number of shares outstanding from about 80 million units to 7.5 billion units.
The board of directors declared a dividend of N23.4 billion, which is 77.0% dividend payout ratio, implying a dividend per share of N3.12 for shareholders.
In 2023, the power generating company’s shareholders’ fund grew by 52.4% year on year to N57.9 billion from N38.0 billion in the comparable period in 2022. #Transcorp Power Budgets $44m to Boost Capacity, Eyes Green Energy
