Transcorp Hotels Reports 188% Profit Growth In H1-2024

Transcorp Hotels Reports 188% Profit Growth In H1-2024

Transcorp Hotels Plc has announced a remarkable 188% increase in profit before tax for the first half of 2024, reaching ₦10.5 billion compared to ₦3.6 billion in the same period last year. This significant growth was highlighted in the company’s unaudited financial statements for H1 2024.

The hotel chain reported revenue of ₦29.7 billion for the first six months of 2024, reflecting a 61% year-on-year increase from ₦18.5 billion in H1 2023. Net profit also saw a substantial rise, up 169% to ₦6.6 billion from ₦2.5 billion in H1 2023.

Key Financial Highlights:

Revenue: ₦29.7 billion (+61% YoY)
Cost of Sales: ₦8.5 billion (+71% YoY)
Gross Profit: ₦21.2 billion (+57% YoY)
Gross Margin: 71% (down 200 bps YoY)
Operating Profit: ₦12.1 billion (+116% YoY)
-Operating Margin: 41% (down 11 percentage points YoY)
Profit Before Tax: ₦10.5 billion (+188% YoY)
Net Profit: ₦6.6 billion (+169% YoY)
Earnings Per Share: ₦0.65 (+171% YoY)
Total Assets: ₦136.8 billion (+8.5% YTD)

Despite the overall strong performance, the second quarter of 2024 saw a 22% year-on-year decline in net profit to ₦1.6 billion, down from ₦2.04 billion in Q2 2023.

Operational Insights:

Room Revenue: ₦19.7 billion (up 60% YoY from ₦12.3 billion)
Food and Beverage Revenue: ₦8.7 billion (up 72% YoY from ₦5.0 billion)
Gross Margin on Room Services: 85%

The company benefited from an unrealized FX gain of ₦3.9 billion, which contributed to a net operating income of ₦4.2 billion. Interest payments on debts decreased to ₦1.4 billion from ₦1.8 billion the previous year.

However, Transcorp Hotels faced rising operational costs, including an 81% increase in energy costs to ₦2.2 billion and a 129% rise in hospitality costs to ₦2.43 billion. Overall operating expenses climbed 51% year-on-year to ₦13.3 billion.

Recent Developments:

In February 2024, Transcorp Hotels completed the sale of Transcorp Hotels Calabar, receiving ₦308 million in proceeds. The deal’s value was reported at approximately ₦2.5 billion.

Transcorp Hotels also maintains a total loan portfolio of about ₦21.9 billion, with ₦3.48 billion due in August 2024.