Transcorp records N5.93bn pre-tax loss

Transnational Corporation of Nigeria (Transcorp) Plc recorded a pre-tax loss of N5.93 billion in 2016 as the conglomerate struggled with ballooned finance costs and foreign exchange (forex) losses.

Key extracts of the audited report and accounts of Transcorp showed considerable improvements in operating activities. Total sales rose by 45.8 per cent while gross profit and operating profit rose by 24 per cent and 37.9 per cent respectively.

However, foreign exchange loss leapt by 208.6 per cent and compounded other finance costs to increase the conglomerate’s net finance loss by 127.5 per cent, turning the bottom-line to red.

Group turnover rose from N40.75 billion in 2015 to N59.42 billion in 2016. Gross profit also improved from N24.33 billion to N30.17 billion. Operating profit rose to N20.72 billion in 2016 as against N15.03 billion in 2015. Forex loss however worsened from N6.06 billion in 2015 to N18.70 billion in 2016. With this, net finance loss stood at N26.64 billion in 2016 compared with N11.71 billion in 2015.

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With these, the conglomerate suffered a pre-tax loss of N5.93 billion in 2016 compared with a pre-tax profit of N3.32 billion in 2015. After taxes, net loss reduced to N1.13 billion in 2016, still a significantly worse position than net profit of N2.03 billion posted in 2015.

The Tony Elumelu-led board of directors of the conglomerate said it has transferred the loss for the 2016 business year to the conglomerate’s general reserves and made no recommendation on any dividend payment for the year.

Transcorp, which is trading around its lowest price at 69 kobo per share, was unchanged as the earnings report appeared to have been factored into the conglomerate’s steep decline. It had traded at a 52-week high of N2.13 per share. Transcorp had distributed a total of 1.936 billion ordinary shares as bonus shares to its shareholders as dividend for the 2015 business year as profit fell during the year.

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