Transcorp Hotels: Robust  Profit Translates to Milestone Dividend Payout

Kayode Tokede  

Transcorp Hotels Plc improved on its profitability momentum in the 2024 audited financial year that translated into a milestone dividend to shareholders who invested in the company’s stock on the Nigerian Exchange Limited (NGX). 

The company’s performance in 2024 further reinforced its position as a market leader in the hospitality industry.

The company in the financial year ended December 31, 2024 declared a resounding performance, on the backdrop of operational excellence and the execution of its strategic growth initiatives. 

The hospitality subsidiary of Transcorp Group, announced profit before tax of N22.61 billion in 2024, about 138 per cent increase over  N9.48 billion in 2023, while profit after tax increased to N14.90 billion in 2024, representing an increase of N6.09 billion in 2023 financial year. 

Amid increase in profits, the management approved and paid an interim dividend of N1.02 billion  or 10 kobo per ordinary share  and proposed N6.56 billion or 64 kobo per share as final dividend, bringing the total dividend for 2024 to  N7.58 billion or 74 kobo per share (2023: N2.05 billion or 20 kobo) on the outstanding ordinary share  of 10,242,528,411 shares of 50 kobo each for 2024.  

Return on assets increased from 4.83 per cent in 2023 to 10.59 per cent in 2024.

Return on Equity: Return on equity grew from 9.12 per cent in 2023 to 18.50 per cent in 2024, demonstrating efficient income generation from equity.

From the profit & loss figures, the Group declared  a revenue of N70.13 billion revenue in 2024 financial year, about 69 per cent  growth from N41.46billion in 2023, driven by 65.01 per cent and 31.64 per cent contribution from Rooms and Food & Beverage, respectively in 2024.

The top hospitality company’s growth in revenue is on the backdrop of the management expansion in key business segments such as its Rooms service in Transcorp Hilton Abuja.

Revenue from rooms stood at N45.6 billion in 2024, about 70.76 per cent increase from N26.7 billion reported in 2023, while revenue from food & Beverage moved from N26.7 billion in 2023 to N45.6 billion in 2024, about 70.2 per cent growth. 

The company last year completed a new 5,000-capacity event centre, which is proving to be a game-changer in the hospitality and event hosting landscape. 

The state-of-the-art facility further strengthens the hotel’s ability to cater to large-scale conferences, exhibitions, and social events, solidifying its position as the preferred destination for business and leisure travellers.

The group’s cost of sales increased to N20.4 billion in 2024, a growth of 74.9 per cent from N11.67 billion reported in 2023.

Transcorp Hotels spent N12.68 billion on Food and beverages in 2024 from N7.55 billion in 2023, while the amount spent on rooms stood at N7.07 billion in 2024 from N3.9 billion in 2023. 

This brings the group’s gross profit to N49.72 billion in 2024, an increase of 67 per cent from N29.79 billion reported in 2023.

In the year under review, Transcorp Hotel gross profit margin stood at 68.36 per cent from 68.55per cent in 2023.

As operating expenses stood at N29.03 billion in 2024 from N17.26 billion in 2023, operating profit moved from N13.14 billion in 2023 to N26.03 billion in 2024. 

Asset Quality

The Group’s total assets increased to N140.7 billion in 2024, a growth of nearly 12 per cent from N126.09 billion in 2023.

The breakdown of total assets showed that Non-current assets stood at N122.11billion in 2024, a growth of 12.8 per cent from N108.3 billion in 2023, while current assets rise to N18.59 billion in 2024, representing an increase of 4.2 per cent from N17.8 billion reported in 2023.

As Transcorp Hotels non-current liabilities dropped by nearly 2.1 per cent to N26.42 billion in 2024 from N25.99 billion in 2023, its current liabilities grew by 5.77 per cent to N33.75 billion in 2024 from N31.9 billion reported in 2023.

This brings total liabilities to N60.2 billion in 2024, an increase of 1.48 per cent from N59.3 billion reported in 2023. In 2024 financial year, the group declared N80.52 billion total equity, a growth of 20.5 per cent from N66.8billion reported in 2023. 

The Company has over the years built and maintained a healthy debt capacity and creditworthiness. The gearing ratio improved from 17.48per cent in 2023 to 9.30 per cent in 2024, due to the consistent principal repayment of third-party loans.

Maximising shareholders’ value

The Chairman of Transcorp Hotels, Emmanuel Nnorom in a statement  highlighted the Company’s commitment towards maximising shareholder value.

He said, “We remain deeply committed to enhancing shareholder value and delivering strong returns to our investors, ensuring that Transcorp Hotels continues to set the standard for hospitality excellence. The hospitality sector continues to be a vital contributor to Nigeria’s economy, and we are proud of Transcorp Hotels’ role in shaping the industry’s future.”

The Managing Director/CEO of Transcorp Hotels, Uzo Oshogwe, emphasised the Company’s commitment to innovation, exceptional service and continuous growth. “Thanks to the dedication and passion of our teams, 2024 was a year of strong growth and significant milestones. 

“Despite the inflation and other macro-economic challenges, we remain focused on delivering outstanding hospitality experiences, expanding our offerings, and implementing a strategy that unlocks the full potential of our business for all stakeholders,” he stated.