Transnational Corporation Plc delivered strong top-line growth in Q1 2025, driven by robust performance from its power and hospitality segments, but rising costs, non-recurring income effects, and higher tax burdens weighed on bottom-line margins and investor returns.
One of the most striking developments in the period was the 214% surge in earnings per share (EPS) to 192 kobo, up from 61 kobo in Q1 2024. This sharp rise was largely due to the share reconstruction, which reduced the outstanding shares to 10.16 billion, enhancing per-share earnings visibility despite only modest net profit growth.
Key Highlights
- EPS: 192 kobo, up +214% YoY (boosted by share reconstruction)
- Net Profit: ₦36.78 billion, up +2.3% YoY
- Pre-Tax Profit: ₦49.41 billion, up +8.1% YoY
- Group Revenue: ₦143.7 billion, up +62.3% YoY (after intercompany adjustments)
- Power Segment Revenue: ₦126.8 billion, +69.7% YoY
- Hospitality Revenue: ₦21.0 billion, +51.9% YoY
Despite this stellar revenue performance, profitability margins contracted sharply, with pre-tax margin declining to 34.4% (from 51.6%) and net margin sliding to 25.6% (from 40.6%). The contraction is attributed to a number of factors:
- Non-recurrence of a ₦11 billion gain from investment sales that bolstered other income in Q1 2024
- Cost of sales up by 66.3% YoY, driven by a 54.3% jump in natural gas and fuel expenses
- Gross margin declined to 51.0% from 52.2%
- Operating expenses nearly doubled, reflecting higher impairment charges, rising management and staff costs, and elevated utility expenses
- Net finance costs surged, including a ₦628.7 million FX loss
- Effective tax rate rose to 25.7% from 21.4%
Moreover, because its subsidiaries—such as Transcorp Hotels and Transcorp Power—are not wholly owned, profit attributable to the parent dropped by 21.4% year-on-year to ₦19.5 billion, despite higher group earnings.
On performance metrics, annualized ROA fell to 18.6% from 26.0%, while ROE dropped to 51.7% from 69.8%, reflecting the drag from increased costs and a lower share of consolidated profits.
Conclusion:
Transcorp Plc remains a resilient player in Nigeria’s energy and hospitality landscape, with Q1 2025 results reflecting the underlying strength of its subsidiaries. However, the combination of higher operating costs, FX losses, and absence of non-recurring gains has diluted profitability. The impressive rise in EPS masks underlying margin pressure and a drop in shareholder-specific returns. Going forward, cost discipline and further efficiency gains will be critical to sustaining earnings momentum and restoring margin expansion.
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