Transcorp Hotels reports N9.4 billion pre-tax profit, up 108% YoY.

Transcorp Hotels Plc has reported a profit before tax of N9.412 billion for the year ended 31 December 2023.

According to the financial statements reviewed by Nairametrics, Transcorp Hotels reported revenue of N42.701 billion, a 35.81% increase from the N31.442 billion reported the year prior.

A significant portion of this revenue was from room sales, which constitutes about 64% of total revenue.

Key highlights (2023 vs 2022 FY)

Gross earnings: N42.701 billion +35.81% YoY
Cost of sales: N12.089 billiion +33.55% YoY
Gross profit: N30.612 billion +36.72% YoY
Operating expenses: N18.103 billion +23.70% YoY
Operating profit: N13.207 billion +52.51% YoY
Finance cost: N3.880 -6.33% YoY
Profit after tax: N6.098 billion +132.93% YoY
Earnings per share: N0.60 +130.77% YoY

Commentary: TRANSCOHOT emerged as one of the top-performing stocks on the NGX in 2023, boasting a share price appreciation of 1.023% YtD.

This year, the stock closed the most recent trading session at N97.90, bringing the YtD gain to 39.5% and rejoined the SWOOT category.

Recommended Reading: SWOOTs: UBA, Access Holdings, and Transcorp Hotel drop out, as Geregu Power remains

Key highlights of the result

Profit surge: The substantial growth in pre-tax profit can be attributed to the higher growth in revenue relative to the growth in cost of sales.
Expense Analysis: Operational expenses have seen a persistent increase, with energy costs playing a significant role in driving overall costs higher. Energy expenses surged from N2.3 billion in 2022 to N2.87 billion, reflecting a notable rise.

Balance Sheet: Total assets experienced a slight increase, growing by 4.32% YoY to reach N125.687 billion. Despite this growth, the company’s net debt stood at N11.7 billion. However, it’s worth noting that interest expenses are well covered by operating profit.