H1 2023: Geregu Power posts 2.65% growth in revenue to N34.7bn
By Philemon Adedeji
Geregu Power Plc, an electric power generating company has released its unaudited half year result ended June 30th 2023, the results delivered shows financial performance of the company during the specified period.
It shows the revenue generated, expenses incurred, and the resulting profits. The company experienced a modest increase in revenue of 2.65 per cent during the period, with total revenue reaching N34.7 billion, Gross profit also increased by 7.02 per cent to N18.160 billion as of end of June 30th 2023 from N16.969 billion accounted in H1 2022, indicating improved profitability.
However, the operating profit declined by 5.02 per cent compared to the previous year, resulting in a lower profit before tax (PBT) of N12.3 billion down by 8.85 per cent.
The income tax expense declined by 3.30 per cent to N4.238 billion in H1 2023 from N4.383 billion generated in H1 2022.
As a result, the company’s profit after tax (PAT) decreased by 11.52 per cent, reaching N8.053 billion in six months of 2023 from N9.102 billion accounted in six months of 2022
The earnings per share (EPS) also declined by 11.54 per cent to N3.22 at the end of June 30th 2023 from N3.64 generated at the end of June 30th 2023, reflecting a decrease in profitability per outstanding share.
The financial position provides an overview of the company’s assets, liabilities, and net assets at the end of the reporting period. The company’s current assets decreased by 13.28 per cent to N117.9billion while total assets declined by 10.66 per cent to N155.5 billion.
This decrease in assets can impact the company’s liquidity and ability to meet short-term obligations.
On the other hand, current liabilities increased by 12.76 per cent, amounting to N54.6 billion
However, the total liabilities decreased slightly by 5.28 per cent to N118.3 billion
The net asset value experienced a significant decline of 24.33 per cent to N37.157 billion which may indicate a decrease in the company’s overall financial strength.
The cash flow statement outlines the inflows and outflows of cash from operating, investing, and financing activities.
The net cash flow from operating activities increased by 32.48 per cent to N30.619 billion, indicating improved cash generation from the company’s core operations.
The net cash flow from investing activities turned positive, amounting to N3.709 billion compared to a negative cash flow of N4.2 billion in the previous year.
This change suggests a shift towards investments and potentially acquiring assets. However, the net cash flow from financing activities significantly declined by 212.52 per cent to N41.661 billion indicating a decrease in external financing activities or increased repayment of debts.
Overall, the company experienced a negative net cash flow of N7.332 billion reflecting a decrease in cash reserves during the period.
Meanwhile Geregu Power Plc grows its shares all-time high by N350 per share on Tuesday, July 18th taking its market capitalization rises to N875 billion.
The company reached this milestone amidst renewed buying interest in the stock.
The rise in market capitalization is also boosted by investors’ confidence in reports that the company plans to develop a power transmission project in partnership with the Lagos state government.
Recall that Geregu Power had disclosed plans to partner with Lagos State Government and AfDB to develop Nigeria’s first PPP power transmission project.
This disclosure was made public by the Chairman, Femi Otedola after he had a meeting with the Lagos state Governor, Mr Babajide Sanwo-Olu, and the President of the African Development Bank Group Dr Akinwunmi Adesina in Lagos state.
It is believed that the project is poised to become the first of its kind in Nigeria as hitherto, private individuals were not allowed to transmit power in the country.
The rise in share price is also attributed to improved quarterly financial performance as the company exceeded its targets.
It was reported that Geregu Power Plc said it has projected to generate N18.17 billion in revenue for the second quarter ending June 2023.
However, in its unaudited Q2 financial statement, the company exceeded its projections as its revenue for the quarter was N20.4 billion compared to N15.2 billion in the corresponding quarter of 2022.
It also recorded a pre-tax profit of N6.9 billion for the period.
Geregu Power Plc went public on the main board of the NGX on 5th October 2022.
The company listed 2.5 billion ordinary shares of 50 kobo each at a share price of N100 per share valuing the company at about N250 billion on the first day.
Share Price of Geregu Power is currently trading at N350 per share bringing its market capitalization to N875 billion. The stock has gained 250 per cent since its IPO.
