Transcorp Hotels: Profit up by 188% in H1, 2024

Transcorp Hotels posted a profit before tax of N10.5 billion in the first half of 2024, marking a 188 percent year-on-year improvement from the N3.6 billion posted in the corresponding period in 2023.

This was disclosed in the group’s unaudited financial statements for the first half of 2024.

In the first half of 2024, Transcorp Hotel posted a revenue of N29.7 billion, marking a 61 percent YoY growth from the N18.5 billion revenue posted in H1 2023.

It also recorded a 169 percent YoY growth in its net profit, as it recorded a net profit of N6.6 billion, in contrast with N2.5 billion posted in H1 2023.

The second quarter of 2024 was less profitable than Q2 2023, as Transcorp Hotel recorded a net profit of N1.6 billion, marking a 22 percent YoY decline from the N2.04 billion posted in Q2 2023.

During the period under review, the bulk of the group’s revenue came from rooms. The group recorded about N19.7 billion from rooms in H1 2024, representing a 60% improvement from the N12.3 billion posted in H1 2023. It also generated N8.7 billion from food and beverage, marking a 72 percent improvement from the N5.0 billion generated in H1 2023.

The major source of the group’s gross profit was its rooms, as the gross margin on its room services was 85 percent.

During the period, Transcorp Hotel recorded an unrealized FX gain of N3.9 billion, which contributed to its net operating income of N4.2 billion. The group’s interest payment on debts and borrowing was about N1.4 billion, a year-on-year decline from the N1.8 billion incurred in H1 2023.

Transcorp Hotel’s energy costs increased by 81 percent YoY to N2.2 billion in H1 2024, from N1.2 billion as of H1 2023. The group also incurred a 129 percent growth in its hospitality costs to N2.43 billion, from N1.06 billion as of H1 2023.

These contributed to a 51 percent YoY increase in operating expenses, which reach N13.3 billion in H1 2024, compared to N8.8 billion in H1 2023.

Transcorp Hotels presently has a total loan portfolio of about N21.9 billion, with about N3.48 billion due in August this year.

Recall that in February 2024, Transcorp Hotels announced the complete sale of Transcorp Hotels Calabar, with the company receiving about N308 million as proceeds from the sale of the hotel in H1 2024.

However, the value of the deal according to the financial statements was about N2.5 billion.