Transcorp Power Forecasts N500bn Annual Revenues by 2031

…achieves 40% CAGR in profit over past four years

Transcorp Power a major Nigerian power producer expects its annual revenues to surge to over N500 billion by 2031, from N142 billion in 2023. Revenues last year were also up 57% from 2022 levels.

This was revealed by the CEO Peter Ikenga at a conference call following its 2023 Full Year results.

Transcorp power is spending over N44bn ($44m) in capex in 2024 to help achieve 740 megawatts (mw) of available capacity by 2024 year end, with 240mw set to be added by this summer. The firm is in talks with 3 Discos to help receive excess power it produces that the national grid cannot handle.

The firm is investing to boost cost optimization, improve gas usage and efficiency, and boosting capex on turbines maintenance.

Its play in West African power pool which brings in 18% of revenue will help to reduce FX risk. The company currently accounts for 7.0% of Nigeria’s installed grid capacity but generates 10.0% of the country’s power needs, with its leadership position in the West African Power Pool (WAPP) and planned strategic alliances with DISCOs, eligible customers, and state governments leaving legroom for output growth in the near term.

Analysts say the material export component of revenue is likely to continue providing some important hedge against the negative impact of Naira devaluation on costs linked to energy and equipment maintenance.

Transcorp Power employs 100% of Nigerians in its workforce, and plans to add further 200mw as part of its growth plans between 2024 and 2026.

It has grown its profit by over 40% compound annual growth rate (CAGR) in the past 4-years. Transcorp Power shares were listed by introduction at N240 per share on the NGX in March.

The Board of Directors of Transcorp Power recommended an interim dividend of N23.46 billion (2022: N17,166,275,000). This represents a dividend payout ratio of 77.6%. Transcorp Power stock is up +57% year to date and has a market capitalization of N2.827 trillion.

“The time to invest in Transcorp Power is now and we will continue to make our investors smile,” Ikenga said.

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