Transcorp EPS Spikes 214.8% after Share Reconstruction
Transnational Corporation Plc earnings per share (EPS) spiked by more than 214% year on year in the first quarter of 2025, following the group’s share reconstruction.
Analysts noted that the recent share reconstruction reduced the number of outstanding shares to 10,161,998,000, significantly lifting EPS to 192 kobo from 61 kobo in Q1’24.
The conglomerate that warehoused major listed companies like Transcorp Hotels and Transcorp Power is worth about N470 billion, though its subsidiaries weigh far more in the stock market.
In the first quarter of 2025, Transcorp Plc net profit grew to N36.7 billion, up by 2.3% year on year from N35.923 billion in the comparable period in 2024.
The group revenue performance was strong, but analysts highlighted that the non-recurrence of the prior year’s N11.0 billion gain from investment sales led to a significant drop in other income, which weighed on overall profitability during the period.
Analysts said the group strong revenue growth was underpinned by solid performances across its power and hospitality subsidiaries.
The power segment—comprising Transcorp Power and TransAfam Power—delivered a combined revenue of N126.8 billion , up by +69.7%, buoyed by increased energy delivery and higher capacity charges.
Meanwhile, the hospitality business posted N21.0 billion in revenue, which reprsents an increase of+51.9% year on year, likely supported by improved occupancy rates and stronger average room rates.
Analysts at CardinalStone Securities Limited stated in their review note that after adjusting for intercompany eliminations and contributions from the corporate centre, group revenue rose by 62.3% year on tear to N143.7 billion.
Transnational Incorporation’s Cost of sales rose by 66.3% year on year to N70.4 billion in Q1, driven primarily by 54.3% increase in natural gas and fuel expenses, which now account for 75.7% of total costs of goods sold. As a result, the gross margin edged down to 51.0% from 52.2% in the comparable period in 2024.
Details from the group’s unaudited financial statement showed that operating expenses nearly doubled, reflecting higher impairment losses on financial assets, increased management fees, staff costs, and elevated electricity and diesel expenses.
Analysts said the non-recurrence of last year’s one-off gain from investment sales led to a sharp decline in other income, compounding the pressure on profitability.
Investor key metrics shrank in the first quarter. UP by 8.1% year on year, pretax profit settled at N49.407 billion in Q1-2025, from N45.686 billion in the equivalent period in 2024.
Transcorp net income came in at N36.782 billion, 2.3% above N35.923 billion the company posted in the equivalent period in 2024. Hence, the group’s pretax profit and net profit margins fell to 34.4% from 51.6% in Q1-2024 and 25.6% from 40.6% in Q1-2024, respectively.
Analysts attributed the contraction to a spike in net finance cost, which was exacerbated by a foreign exchange loss of N628.7 million and a higher effective tax rate of 25.7% compared with 21.4% in Q1-2024.
Given that the subsidiaries are not wholly owned by the group, profit attributable to the parent declined by 21.4% year on year to N19.5 billion, CardinalStone Securities Limited said.
On profitability metrics — annualised return on asset (ROA) and return on equity (ROE)—were weaker, printing at 18.6% from 26.0% in Q1-2024 and 51.7% from 69.8% in Q1-2024, respectively. #Transcorp EPS Spikes 214.8% after Share Reconstruction Pension Fund Assets Grows to N23.366 Trillion
