Last Update30 Jul 25
Subject: Transcorp Plc Delivers Impressive 59% Revenue Growth and 23% Profit Surge in H1 2025 — Solidifying Growth Stock Status
Transnational Corporation Plc (Transcorp) continues its strong earnings trajectory, delivering a 23.4% YoY increase in Profit After Tax (PAT) to N65.17bn for the half-year ended June 30, 2025. The result underscores the conglomerate’s solid performance across its energy, hospitality, and power businesses, even amid macroeconomic challenges.
The highlight of this period was the 59.4% increase in revenue to N279.68bn, translating into a 53.2% rise in gross profit to N130.92bn, showing efficient cost-to-revenue leverage despite higher inflation and administrative costs. This surge in topline reflects strong execution in power generation (Transcorp Power, Afam Power) and improved occupancy rates and average daily rates in the hospitality segment (Transcorp Hilton, Transcorp Hotels Calabar).
Operating profit rose 19.5% to N91.98bn, while earnings per share (EPS) jumped significantly to 408 kobo from 81 kobo, indicating a sharp improvement in shareholder value.
Strengths:
- Exceptional revenue growth (+59%) and earnings momentum
- Consistent performance in Q2 with 68.6% YoY profit growth
- Strong balance sheet with 20.7% asset growth
- Significant increase in retained earnings and equity base
- Improved EPS (408 kobo) positions Transcorp among top performers
Weaknesses:
- Administrative expenses rose by 69.9%, pressuring margins
- Drop in “other income” (N1.88bn vs N16.45bn in H1 2024) reduces ancillary contributions to earnings
- Higher impairment losses and finance costs due to interest rate environment and credit expansion
Key Catalysts:
- Increased power generation capacity and stability in electricity pricing
- Expansion in hotel bookings due to tourism and business travel rebound
- Effective cost control to counter rising administrative costs
- Possible dividend declaration from retained earnings growth
- Monetization of gains from fair value adjustments on equity instruments
Risks:
- Persistent inflation could keep administrative expenses elevated
- Policy uncertainty in the power and energy sector may affect future tariffs or capital allocation
- FX volatility may impact import-related costs or dollar-denominated debt
- Unpredictability in tourism/hospitality due to geopolitical or public health factors
Transnational Corporation Plc (Transcorp) delivered strong top- and bottom-line performance for the half-year ended June 30, 2025, reinforcing its position as a diversified conglomerate with robust growth momentum, especially in its power and hospitality segments.
🔑 Key Highlights – Group Performance (H1 2025 vs H1 2024)
Metric H1 2025 H1 2024 Change Revenue ₦279.68bn ₦175.43bn +59.5% Gross Profit ₦130.92bn ₦85.48bn +53.2% Operating Profit ₦91.98bn ₦76.97bn +19.5% Profit Before Tax (PBT) ₦85.70bn ₦70.92bn +20.8% Profit After Tax (PAT) ₦65.17bn ₦52.79bn +23.4% EPS (Basic & Diluted) 408 kobo 81 kobo +404% Other Comprehensive Income ₦747m gain ₦1.54bn loss Turnaround
🏢 Parent Company Performance
- Revenue rose by 75.5% to ₦35.82bn (from ₦20.41bn).
- PAT grew by 9% to ₦27.82bn.
- Strong FX gains and lower impairment losses contributed to net profit margin improvement.
✅ Strengths
- Significant revenue growth, likely driven by the performance of the power and hospitality segments.
- Efficient cost management, with gross margin maintained at ~47%.
- Robust operating profit (₦92bn) and net margin (~23%) show strong core business strength.
- Foreign exchange gains (₦2.77bn) boosted bottom line amid volatile currency conditions.
- Higher EPS (₦4.08) provides confidence in earnings quality.
- Positive other comprehensive income, reversing previous year’s fair value losses.
⚠️ Watchouts
- Finance cost increased by 27% YoY to ₦9.05bn, which may rise further if debt increases or rates remain high.
- Impairment on financial assets (₦4.86bn) remains elevated, albeit consistent with the prior year.
- Heavy dependence on FX gains and non-controlling interest (₦23.7bn) for full earnings impact may need to be sustainable.
Transcorp Plc’s strong revenue growth, rising profitability, and impressive EPS surge point to a well-executed operational strategy. The company's diversified structure, particularly its exposure to the power and hospitality sectors, offers resilience and upside in Nigeria’s growing infrastructure and consumer markets.
We recommend a BUY, with a short- to medium-term outlook focused on:
- Sustained power sector expansion,
- Further cost optimization,
- Debt management and potential dividend upside.
How well do narratives help inform your perspective?
Disclaimer
The user WaneInvestmentHouse holds no position in NGSE:TRANSCORP. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.