Transcorp Hotels Offers N1.14bn Dividend, As 2018 Profit Jump 38.5% To N3.7bn

When shareholders of Transcorp Hotels Plc gather for their annual general meeting on March 15 in Abuja one of the proposals the directors will put before them is to consider and approve a total dividend of N1.14bn, up from the previous N947m. This translates to 15 kobo per share for the full year ended December 31, 2018, up from 12.45 kobo, out of the Earnings Per Share of 49 kobo and 35 kobo respectively for both years.

Qualification date for the dividend is February 27, following which the register of shareholders will be closed between February 28 and March 1, payment is slated for March 19.

The company’s numbers showed continued improvement in profit, which grew faster than revenue, especially from its flagship Abuja facility, despite significant drop in other operating income and finance income for the period.

Revenue for the year rose by N3.581bn, or 25.87% from N13.643bn in the corresponding period of 2017 to N17.424bn, with the bulk being its rooms which fetched a cumulative N10.739bn. The lion’s share of this was the N10.217bn from the Transcorp Hotels, Abuja, while the Abuja arm contributed N522.027m.

Food and beverages followed with N5.239bn contribution still led by Abuja’s N4.852bn, while Calabar fetched N386.854m; Abuja added N673.224m to shop rentals and Calabar, nil, among others. This brought the contribution of Abuja to group revenue to N16.475bn, up from N12.962bn in 2017; leaving Calabar with just N949.246m, as against N880.89m.

Cost of sales was constrained slightly within the period, rising by 20.54%, or N773.017m to N4.536bn from N3.763bn, boosted also by food and beverages as the biggest contributor at N2.897bn, up from N2.381bn; followed by ‘rooms,’ at N1.469bn from N1.233bn; while other operating costs rose to N169.512m from N149.07m.

Gross profit therefore inched N2.808bn or 27.86% up from N10.08bn to N12.888bn.

Other operating income fell from N1.178bn in 2017 to N571.336m, representing a decline of N607.393m or 51.53%, mainly driven by net foreign exchange gains that slipped from N954.607m to N310.297m; administrative expenses limped N634.83m or 8.14% up to N8.43bn, from N7.796bn; the lion’s share of which was the N1.444bn staff cost, rising from N1.308bn, followed by the N1.165bn management and incentives fees, up from N943.374m; and energy cost, N1.278bn, up marginally from N1.208bn. This resulted in operating profit of N5.029bn, a 45.23% improvement from N3.68bn in 2017 to N5.029bn.

Finance costs climbed to N5.395bn from N3.212bn; boosted by interest on debts and borrowings of N5.395bn, up from N3.212bn, while the interest income on deposits at N61.991m, up from N29.672m left capitalized borrowing cost at N5.333bn, up from N3.182bn.

Finance income dropped by N204.977m or 94.38% to N12.19m, compared to previous year’s N217.167m, after the repayment of the N186.893m interest on intercompany loan at the end of 2017, just as interest on bank deposits fell from N30.274m in prior year to N12.19m.

This brought profit before tax to N5.041bn, an improvement of N1.361bn or 36.99% over the N3.68bn reported in prior year. Income tax for the period rose by N329.463m or 32.99% from N998.422m to N1.327bn; leaving profit after tax at N3.713bn, compared to N2.681bn in the corresponding period of 2017, representing a N1.031bn or 38.48% improvement within the period.

https://investdata.com.ng/2019/02/transcorp-hotels-offers-n1-14bn-dividend-as-2018-profit-jump-38-5-to-n3-7bn/