Transcorp Hotels has announced a remarkable 188 per cent increase in profit before tax for the first half of 2024, reaching ₦10.5 billion. This is a significant rise from the ₦3.6 billion reported in the same period in 2023, according to the company’s unaudited financial statements for H1 2024.
The company’s revenue for the first half of 2024 reached ₦29.7 billion, which represents a 61 per cent year-on-year growth from ₦18.5 billion in H1 2023. This growth was primarily driven by increased revenue from room services and food and beverage sales. The revenue from rooms alone amounted to ₦19.7 billion, marking a 60 per cent improvement from ₦12.3 billion reported in H1 2023. Additionally, food and beverage revenue grew by 72 per cent, reaching ₦8.7 billion compared to ₦5.0 billion in the previous year.
Despite the overall strong performance, the second quarter of 2024 was less profitable compared to Q2 2023. The company reported a net profit of ₦1.6 billion for Q2 2024, which is a 22 per cent decline from ₦2.04 billion in Q2 2023.
The gross profit for the first half of 2024 was ₦21.2 billion, reflecting a 57 per cent increase from ₦13.5 billion in H1 2023. The gross margin stood at 71 per cent, a decrease of 200 basis points from the previous year. Operating profit also showed a significant rise, up 116 per cent to ₦12.1 billion from ₦5.6 billion in H1 2023. However, the operating margin decreased to 41 per cent, down 11 percentage points year-on-year.
Net profit for the period was ₦6.6 billion, a 169 per cent increase from ₦2.5 billion reported in H1 2023. Earnings per share for the period were ₦0.65, marking a 171 per cent increase from the previous year’s figure. The total assets of Transcorp Hotels grew to ₦136.8 billion, reflecting an 8.5 per cent increase year-to-date.
Operational highlights included an unrealised foreign exchange gain of ₦3.9 billion, which contributed to a net operating income of ₦4.2 billion. The company’s interest payments on debt decreased to ₦1.4 billion, down from ₦1.8 billion in H1 2023.
However, the company faced increased operational costs. Energy expenses rose by 81 per cent to ₦2.2 billion, up from ₦1.2 billion in H1 2023. Hospitality costs also increased by 129 per cent, reaching ₦2.43 billion compared to ₦1.06 billion in the previous year. These rising costs led to a 51 per cent increase in operating expenses, which totaled ₦13.3 billion compared to ₦8.8 billion in H1 2023.
Regarding its financial obligations, Transcorp Hotels currently has a loan portfolio of approximately ₦21.9 billion, with ₦3.48 billion of this amount due for repayment in August 2024.
In February 2024, Transcorp Hotels completed the sale of Transcorp Hotels Calabar. The proceeds from this sale amounted to approximately ₦308 million, although the transaction was valued at around ₦2.5 billion according to the financial statements.
