Transnational Corporation of Nigeria (Transcorp) saw its net profit for the first three months of the year slow by 63.1 per cent as costs rose at a quicker pace than revenue.
Details of the company’s financial report published on Monday showed that it incurred N2.4 billion in foreign exchange loss, about five times the figure for the same period of last year.
The development echoed the ordeal of many companies in corporate Nigeria, where a prolonged dollar scarcity is pushing import-dependent businesses to the brink.
Marginally growing by 3.2 per cent, revenue came to N32.4 billion compared to the N31.4 billion recorded in the first quarter of last year.
Transcorp, a conglomerate of ten companies in oil and gas, power as well as hotel and hospitality sectors, generates more than half of its revenue from electricity generation.
Cost of sales leapt by more than one-tenth to N18.2 billion as the spending on natural gas & fuel, as well as food and beverage, surged in a quarter when Nigeria’s cost of living crisis threw the inflation rate close to its peak in nearly eighteen years.
The corporation earned 40 per cent more in other income and considerably cut impairment loss on financial assets. However, operating profit still fell, taking a battering from a jump in administrative expenses from N5.2 billion to N5.9 billion.
Energy magnate Femi Otedola is said to have racked up shares to the equivalent of a 5.5 per cent stake in Transcorp, making him the second on its ownership pecking order behind UBA Nominees Limited, which holds 9.25 per cent.
But last Thursday, the company disclosed in a statement the corporation was yet to be notified of the deals, executed off-market, from the new substantial shareholder.
Profit before tax contracted by half to N2.9 billion, while profit for the period plunged to N1.9 billion from N5 billion.
Transcorp, which announced two years ago plans to broaden its energy mix by setting up Nigeria’s first nuclear plant, increased its investment in property, plant and equipment eight times over in the quarter under review.
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