Transnational Corporation of Nigeria (Transcorp) Plc on Saturday expressed optimism that the company would return to profitability in 2017 financial year.
Mr Emmanuel Nnorom, Transcorp President and Chief Executive Officer, made this known in Lagos on the sidelines of the company’s media parley on the 2016 audited result.
Nnorom said that improvement in the foreign exchange market and increase in power supply would boost the company’s profit and revenue in 2017.
He said that the company’s key business areas such as power and hotel business would perform better in the current financial year.
Nnorom said that the company was well positioned for greater performance with 60 to 70 per cent occupancy level target on completion of the Transcorp Hilton, Abuja, upgrade and power generation of 600MW by Transcorp Power.
“We are seeing improvement in our power business and we are seeing in our hotel business, all that will contribute significantly to the result for 2017.
“We will see profit that is much bigger than what we have seen in the past,” he said.
Nnorom attributed the loss position posted by the company in 2016 to unrealised foreign exchange loss due to the impact of material devaluation of Naira against the U.S dollar (USD) on a USD acquisition facility for the power subsidiary.
He said that the official exchange rate at the end of the year was N304 per dollar compared to N196 per dollar at the beginning of 2016.
He said that the average generation at Transcorp Power Ltd. was 55 per cent of the available capacity during 2016 compared to 65 per cent in 2015 financial year.
“The generating capacity for Transcorp Power Ltd. declined significantly during the year as a result of the deteriorating gas supply from gas pipeline disruptions.
“In spite of this, Transcorp Power remained a top three players in terms of power contributed to the national grid.
“We recovered significantly from the exchange loss during the year, as we maintained cost levels and efficient liquidity management, despite a debt of N50 billion from invoices generated for power production.
“However, our hospitality business remained resilient, posting stronger year on year performance.
“Specifically, we continue to maintain market leadership with occupancy levels that are ahead of competition,’’ he said.
Nnorom said that the company’s second hotel, Transcorp Hotel, Calabar, started on a track strong performance achieving profitability.
“We are confident of improved fundamentals going forward, as we are increasing our available generation capacity to 850 MW by year end taking advantage of recently improving gas situation.
“We expect continued liberalisation of foreign exchange market in line with the recent development, which will help to create needed liquidity and solution for our USD facility.
“We expect to benefit from the upside of the new improved infrastructure upon competition of our upgrade project in Transcorp Hilton, Abuja.
“The upgrade project is currently on track. It is our strong believe that the impact of the difficult operating environment is temporal and diligent execution of our growth strategy.
“Our investment position remains strong in the near term,” Nnorom said.
NAN reports that the company for the financial year ended Dec. 31, 2016 posted a profit before tax of N5.93 billion against N3.32 billion achieved in the comparative period of 2015.
Its group revenue stood at N59. 42 billion in contrast with N40.75 billion in 2015.
The company’s total assets stood at N232.16 billion, representing 27 per cent rise when compared with N182 billion recorded in the corresponding period of 2015.