Transcorp Power Plc reported a solid 52% YoY revenue growth in H1 2025, driven by improved electricity generation and billing efficiency. However, rising costs — particularly in fuel, operations, and finance — compressed margins and impacted quarterly profitability. Despite these headwinds, the company remains a strong player in Nigeria's power generation space, supported by robust demand fundamentals, strategic infrastructure, and improved FX-related gains.

Strengths:

✅ Strong Topline Growth: H1 2025 revenue increased 52% YoY to ₦205.8 billion from ₦135.4 billion, reflecting higher generation capacity utilization, billing efficiency, and improved grid stability.

✅ Profit Growth Sustained: Net profit rose by 20% YoY to ₦44.0 billion, even amid inflationary and FX pressures. This was supported by improved other income and finance income.

✅ Earnings Per Share (EPS) Growth: EPS rose by 20% from ₦4.90 in H1 2024 to ₦5.87, offering attractive shareholder value and payout potential.

✅ Forex Gains Support Bottom Line: The company recorded ₦2.87 billion in FX gains in Q2, cushioning the impact of rising finance costs and helping preserve earnings.

Weaknesses / Risks:

⚠️ Rising Cost of Sales: Cost of sales surged by 77% YoY in Q2 2025, outpacing revenue growth and squeezing gross profit margins (down from ₦28.2bn in Q2 2024 to ₦22.6bn in Q2 2025).

⚠️ Escalating Finance Costs: Finance costs nearly doubled YoY in Q2, growing from ₦1.8 billion to ₦3.66 billion, which may signal higher leverage or interest rate sensitivity.

⚠️ Decline in Quarterly Profitability: Q2 2025 profit declined 20% YoY from ₦14.5 billion to ₦11.6 billion, indicating pressure on margins due to operational and financial overheads.

⚠️ No Dividend Indication Yet: Although EPS is solid, there's no immediate signal on dividend policy, which may concern income-focused investors.

Transcorp Power remains a well-positioned and high-performing IPP (Independent Power Producer) in Nigeria, with growing scale and profit resilience. Its alignment with Nigeria’s power sector reforms and rising energy demand strengthens its investment appeal.

However, cost inflation, currency volatility, and delayed tariff cost-reflectivity are notable risks. Investors should watch for margin stabilization and future guidance on capital structure or dividends.

Transcorp Power Plc Q2/H1 result– Resilient Earnings Growth Despite Margin Pressure

Shared on29 Jul 25

Shared on25 Apr 25