Geregu Power 307% Profit Growth in Q1 a Catalyst For Much Higher Share Price

Geregu Power has become the first NGX listed company to release First Quarter (Q1), 2024 financial results, with the recorded 307.5% profit growth a sure catalyst to push its stock price much higher from current levels.

Geregu Power stock has been consolidating and marking time at the N1,000 per share level since March 4, with investors waiting for positive news which they have now received in spectacular fashion.

Highlights of Q1, 2024

Geregu Power Q1 Results Are Almost as Good as All of 2023

In a sign of accelerating growth, Geregu Power has recorded rapid growth in the First Quarter (Q1) of 2024, with revenue and profit for the quarter almost at par with what the firm recorded all of last year.

Revenue for the period came in at N50.42 billion, up 254% compared to Q1 2023, and equivalent to 61% of total 2023 revenue.

Profit for the period rose a spetacular 307.5% to N14.46 billion, when compared to Q1, 2023, and it was also equivalent to 90% of 2023 Full Year after-tax profit.

Stock is now cheap as EPS jumps

Geregu Power Earnings Per Share or EPS jumped to N5.78 in Q1, 2024. The company’s basic earnings per share of N5.78 (March 2023: N1.42 kobo) is based on the profit attributable to ordinary shareholders of N14,461,232,000, and on the 2,500,000,000 ordinary shares, in issue during the current and preceding period.

Geregu Power stock trades at 92.77 Price to Earnings ratio on a PE ratio trailing twelve months (TTM) basis.

When Q1 2024 results are incorporated into the valuation for Geregu Power, and annualised on a forward PE basis the valuation becomes 50% cheaper, according to MoneyCentral calculations.

N10bn of term loans repaid in Q1

Geregu Powers outstanding term loans fell by 20.54% to N16.57 billion in Q1, 2024 as there was a repayment of N10.968 billion in the period.

N24.55 bn Payment for Gas Turbine Overhaul

Geregu Power Plc made advance payments of N24.55billion for the major overhaul of its gas turbine as of March 2024. The next major overhaul is estimated to cost N37.2 billion, 66% of the estimated cost has been contractually settled and 34% balance is to be from cash generated from operations.

Payment of $4m bid Bond to BPE for Geregu II

Geregu Power in Q1, 2024 made a $4 million Bid Bond for acquisition of Geregu II in favor of Bureau of Public Enterprises with validity period May 23, 2024

Contractual commitments include: N1,742,400,000 – Bank Guarantee in favour of Palero Commodities Limited with validity period of October 11, 2024, N36,693,563-Bond for temporary importation of equipment without payment of import duty in favour of Nigerian Customs Service.

Geregu Power Energy Sold jumps 241%

In a sign of more uptime for the power plant and less gas disruptions, Geregu Power energy sold increased by 241% to N31 billion in Q1 2024, compared to N9.08 billion in March 2023.

This is welcome sign that customers are being supplied power even as the company takes steps to make sure its plants are running optimally through regular repair and maintenance.

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