Transcorp Power Grows Profit by 19.8%, Declares Interim Dividend

Transcorp Power Grows Profit by 19.8%, Declares Interim Dividend

Transcorp Power Plc grew profit after tax by 19.8% year on year to N44.05 billion, its financial statement filed with the regulator has revealed. The company earnings surged amidst uncertainties in the economy, reflecting its escalated cost pressure. 

Details revealed that the company’s revenue jumped by 52.0% year on year to N205.8 billion, buoyed by strong growth across key revenue stream.

Breakdown revealed that income from its capacity charge surged by 30.8% and energy delivered an uptick of 61.5% year on year.  International sales contributed 28.7% to revenue, up from 22.0% in first half of 2024, reflecting increased cross-border demand, CardinalStone said in its update. 

Analysts said Transcorp Power’s revenue boost was tempered by a 76.9% spike in cost of goods sold (COGS) to N128.2 billion, primarily driven by sustained increases in natural gas and fuel costs which rose by 64.1%.

The company saw a fourfold rise in repairs and maintenance expenses. Consequently, the gross margin contracted sharply to 37.7% from 46.5% reported in the first half of 2024.

CardinalStone Securities Limited spotted a 28.6% increase in impairment loss on financial assets and 67.5% surge in administrative expenses further weighed on overall earnings, causing the EBIT margin to fall to 28.7% from 37.8% in the first half of 2024. 

The company reported a combined gain of N6.1 billion from interest income and foreign exchange gains, but these were offset by the 61.0% year on year spike in finance costs, which increased to N6.4 billion in the period.

In terms of profitability, annualized return on asset (ROA) and return on equity (ROE) printed at 19.2% and 65.0%, respectively—strong but notably lower than 26.9% and 96.5% recorded in H1’24, reflecting the modest net income growth.

Notwithstanding, TRANSPOWER has proposed an interim dividend of N1.50 -a robust payout ratio of 25.5%—reinforcing its commitment to shareholder value creation.

On a quarterly basis, the company’s Q2’25 performance was largely undermined by the 97.5% year on year surge in cost of goods sold, outpacing revenue growth of 48.5%.

Accordingly, margins compressed. Nevertheless, the lower effective tax rate of 25.0% as against 34.6% in Q2’24 provided some relief, capping further moderations in the company’s profit after tax, which printed at N11.6 billion. #Transcorp Power Grows Profit by 19.8%, Declares Interim Dividend Nigerian Bond Yield Falls to 16.28% after Coupon Payment