Elumelu: Femi Otedola Should Be Commended for Investing in Transcorp

•Conglomerate rewards shareholders with 150% increase in dividend

Kayode Tokede

The Group Chairman, Transnational Incorporated Plc (Transcorp), Mr. Tony Elumelu, yesterday expressed satisfaction with the recent acquisition of significant stake in the conglomerate by billionaire investor and Executive Chairman of Geregu Power, Mr. Femi Odetola.

THISDAY had reported that Otedola recently emerged as the largest single individual shareholder at Transcorp, a publicly traded diversified conglomerate chaired by Elumelu.

The billionaire, according to the report now owns about 2.6 billion shares, representing 6.3 per cent stake in the company.

However, speaking in an exclusive interview with Arise News Channel, THISDAY’s sister organisation, after the Group’s 17th Annual General Meeting (AGM), Elumelu said he welcomed Odetola’s investment in Transcorp, calling on the general public not to be sentimental about the decision.

According to him, “We go on international roadshows and talk to investors to invest in our companies. I am happy to see an active indigenous investors community. I am happy that Femi Odetola is investing locally and he should be commended for that and I also welcome him for that. 

“That is because the more people show interest in the activities, and performance of the company, the better for shareholders. You want to make your stock investors’ toast and I am happy that Transcorp is becoming investors toast.

“About 10 years ago before we took over Transcorp, people were not interested. People lost confidence in the company. Today under our leadership, Transcorp has consistently paid dividends in the last five years. There is a capital appreciation for the company.”

Speaking further, Elumelu, who is also the Chairman of United Bank for Africa Plc, said: “When friends and investing public invest in a public company like this, it is a validation and tells you they believed in your story, vision, management, leadership and competent.

“I like my friend to come on board and I looked forward with him to take Transcorp to greater height.”

He debunked reports of listing Transcorp Power on the floor of the Nigerian Exchange Limited (NGX), highlighting challenges facing the sector in Nigeria.

“We are long-term players. We wanted to grow more and more significantly. There are a few more things we wanted to do in the power sector so that it can blossom. The transmission line has to be fixed and the gas supply has to be fixed.

“We believe when transmission line is improved, and also address gas supply issue, that will be the right time. We are looking for about five years from now to list on the NGX. We believe in the next five years, the transmission line be fixed and gas supply to the sector would have improved significantly,” Elumelu said.

Speaking on the Group’s performance in 2022 performance, he said the operating environment was tough last year, attributing the Group’s impressive performance to quality of leadership at Transcorp.

“The Group President/CEO, Transnational Corporation Plc, Dr. Owen Omogiafo and her team have done very well in making sure that all the sectors:  Transcorp Power and Transafam Power. Transcorp’s other subsidiaries are Transcorp Hilton Abuja, Transcorp Hotels Calabar, Aura by Transcorp Hotels, and Transcorp Energy are maintaining leaders.

“In our power sector, we have increased generation significantly, helping to improve access to electricity in Nigeria. Transcorp Power generates about 600 MW of electricity every day. We have a store capacity of about 1000 MW and our generating capacity is over 700MW.

“The only reason we cannot do 750 MW a day is because of gas limitation but we are integrating our energy play and hopeful from our oil and gas plant, we will be able to buy gas to Transcorp Power and increase capacity. Nigerians need electricity and that is what we commute to Nigerians.

“Transcorp is about improving lives and transforming society. We know power is critical to the transformation of Nigeria and that is what we are doing.”

 Meanwhile, Transcorp at the AGM declared a dividend of 5k per share, which was a 150 per cent increase over the previous year’s dividend.

Transcorp, which has nearly 300,000 shareholders, held its AGM virtually, making it the first public company in Nigeria to do so since the signing into law of the Business Facilitation Act (BFA), by the President of Nigeria, recently.

Transcorp continued to deliver on its year-on-year growth strategy, with a seven per cent increase in the Group’s total assets, growing to N442.7billion in 2022.

The company’s power business increased its available and generated capacity from 598MW and 373MW, to 720MW and 426MW, respectively, following significant investment and rehabilitation of its generating assets.

Similarly, the Transcorp hospitality business demonstrated its growth trajectory, achieving a record average occupancy rate of 79 per cent, with profit increasing by 172 per cent to N4.5 billion in 2022, from N1.7 billion in the previous year, while revenue grew by 47 per cent to N31.4 billion, from N21.4 billion in 2021.

Profit after tax for the Group declined from N23.8 billion to N16.8 billion, as a result of the provision of N7 billion for deferred tax and exceptional income of N4.5 billion recognised in 2021, derived from the consolidation of Transafam Power Limited.

Speaking during the AGM, Elumelu noted that the Group recorded significant improvements across all key financial and non-financial parameters in 2022.

The Group’s Gross Earnings increased to N134.7 billion and Profit Before Tax to N30.2 billion.

Commenting on the Group’s performance, Elumelu said, “2022 proved to be another strong year for Transcorp, we continued to optimise and expand our portfolio of investments, amidst a challenging operating and economic environment.

“The impact of our long-term investment approach is beginning to be appreciated by the market, with a growth in share price from N0.96 in January 2022 to N2.69 as at close of market yesterday, April 26, 2023. And we continue to deliver to investors, with a dividend of N2 billion being paid to shareholders, representing a 150 per cent increase over the 2021 payment.”

2022 will be the 5th consecutive year of unbroken dividends payment by Transcorp, since the-Elumelu led team assumed leadership of the conglomerate.

Prior to the change in ownership and management in 2011, Transcorp had operated since inception without dividends to its shareholders.

Speaking on the Group’s performance, Omogiafo attributed the Group’s success to its focus on key sectors of the economy, its commitment to investment and its ability to drive execution. “We are strategically positioned and committed to enhanced performance, providing value-adding returns for all stakeholders, and making a positive societal impact. As we move forward, we remain fully dedicated and focused on realising this vision. With the relentless efforts of our team, we are poised to achieve remarkable growth and success for years to come,” she added.

Shareholders at the AGM lauded the company’s professionalism and commitment to growing value for shareholders, stressing that the fully virtual AGM is one of the many firsts Transcorp has achieved.

Dr. Faruk Umar of Advancement of Shareholder Rights Association said “We are very happy with the Board and Management of Transcorp.

“They promised us that as the Company grows, value for shareholders will grow. Today we have seen our dividend, that has increased by 500 per cent under the Elumelu leadership and our share price has also appreciated. We also want to commend the professionalism of the Board for deciding to hold the AGM virtually, making it easier for us to join and make all of us to be more informed.”