Transcorp Nigeria declares 163% PAT growth as analysts recommend ‘buy’ of its shares
Oluwaseun Afolabi is Businessamlive Reporter.
You can contact him on afolabi.oluwaseun@businessamlive.com with stories and commentary.
Transnational Corporation of Nigeria Plc. (Transcorp), Nigeria’s foremost conglomerate, has announced financial results for its half year ended June 30, 2018, showing significant growth in top line and bottom-line indicators, which has prompted analysts to recommend a buy status on the shares of the company.
The company recorded N10.8 billion as profit after tax (PAT) for the half-year ended 30th of June 2017, translating into 163 percent growth compared to the PAT figure of N4.1 billion recorded in the corresponding period in 2017.
The conglomerate achieved the impressive growth in profit from revenue of N54 billion, which represented 58 percent growth from the loss of N34.1 billion recorded in the second quarter of 2017.
In the same vein, the company recorded a profit before tax (PBT) growth of 164 percent to N11.9 billion from the half year 2017 figure of N4.5 billion
While the company’s total assets capped at N290 billion for the period under review from N285 billion attained as at December 31, 2017, the shareholders’ fund grew to N105 billion, up from N95 billion as at December 2017.
With the profit growth, analysts are of the opinion that now will be a good time to invest in Transcorp. With that being said, the shares of the conglomerate went up 2 percent Monday, after opening at N1.23, to close at N1.26 per share
According to Ayodeji Dawodu, head of research, Investment One Financial Services, in an interview with CNBC suggested that the company has shown immense growth following the loss recorded in 2016 and now will be a good time for investors to look towards Transcorp.
“It presents a decent opportunity, they are in a better position now than a year ago or two years ago, there are still some reforms to come in the post-2019 election, but now will be a good time for investors to pick positions in Transcorp and some other names as well”, Dawodu said.
On the half-year performance of the conglomerate, Dawodu suggested that the company put more resources into its power segment, adding that the company’s management should be applauded for their cost efficiency, given the PBT figures released.