Transcorp Hotels Plc sustained its profitability momentum in 2023 audited financial year and dividend payout to shareholders amid domestic macroeconomy challenges.

The company in financial year ended December 31, 2023 declared a resounding performance, driven by the management’s effective management and innovations.

The Group declared N41.45billion revenue in 2023 financial year, an increase of nearly 36.2 per cent from N30.44billion in 2022, driven by 64.4 per cent and 31.45 per cent contribution from Rooms and Food & Beverage, respectively in 2023.

The top hospitality company’s growth in revenue is on the backdrop of the management expansion in key business segments such as its Rooms service in Transcorp Hilton Abuja and Transcorp Hilton Calabar as both remain the first-choice destination for high-profile guests, and catering to guests from all over the world for any travel need including business and leisure.

The group’s cost of sales rise to N11.67 billion in 2023, an increase of 34.1 per cent from N8.7billion reported in 2022.

Transcorp Hotels spent N3.87billion spent maintaining room in 2023 from, while amount spent on food and beverages stood at N7.55 billion in 2023 from N4.85 billion and other operating cost stood at N251.54millon in 2023 from N482.97 million reported in 2022.

This brings the group’s gross profit to N29.79billion in 2023, an increase of 37 per cent from N21.74billion reported in 2022.

In the year under review, Transcorp Hotel gross profit margin stood at 71.85per cent from 71.41per cent in 2022.

As operating expenses stood at N17.26billion in 2023, an increase of 24.5per cent from N13.86billion in 2022, as operating profit grew by 49.9 per cent to N13.14billion in 2023 from N8.77billion in 2022.

The group’s operating expenses was driven by N2.55 billion management cost in 2023 from N1.82billion in 2022 and N2.43billion energy costs in 2023 from N2.03 billon reported in 2022.

In the year under review, the group declared N3.9 billion finance cost, a decline of 5.7 per cent from N4.14billion reported in previous year, while finance income grew significantly to N241.86 million in 2023, an increase of 2727 per cent from N8.6millon posted in 2022.

The breakdown of finance cost showed a N3.12 billion interest on debts and borrowings in 2023, representing a decline of 4.7per cent from N3.27 billion in 2022, while Interest on Intercompany loan payables stood at N1.01 billion in 2023 from N809.2 million declared in 2022.

The group’s bottom-line performance showed a resilient result and accounts with N9.48billion profit before tax in 2023, an increase of 104.6 per cent from N4.663billion inn 2022.

The substantial growth in profit before tax can be attributed to the higher growth in revenue relative to the growth in cost of sales.

With about N3.23billion tax expenses in 2023 from N1.77 billion in 2022, Transcorp Hotels closed 2023 financial year with N6.25billion profit after tax in 2023 as against N2.86 billion reported in 2022.

Amid impressive 2023 performance, the Board of Directors recommended an interim and final dividend of N2.05 billon (2022: N1.33 billion) equivalent of 20 kobo per ordinary share for the year ended 2023.

Total assets

The Group’s total assets increased to N126.09 billion in 2023, a growth of nearly five per cent from N120.5 billion in 2022.

The breakdown of total assets showed that Non-current assets stood at N108.25billion in 2023, a decline of 1.9 per cent from N110.41 billion in 2022, while current assets rise to N17.84 billion in 2023, representing an increase of 77 per cent from N10.08 billion reported in 2022.

As Transcorp Hotels non-current liabilities dropped by nearly five per cent to N26.99 billion in 2023 from N28.39billiion in 2022, its current liabilities grew by 10.3 per cent to N32.3 billion in 2023 from N29.31 billion reported in 2022.

This brings total liabilities to N59.3 billion in 2023, an increase of 2.77per cent from N57.7 billion reported in 2022.

The proportion of total liabilities/total assets stood at 47.03 per cent in 2023 from 47.89 per cent in 2022.

In the period under review, the group’s total equity stood at N66.8 billion, representing 6.38per cent increase from N62.8 billion in 2022, driven by N49.3 billion retained earnings in 2023 from N45.21 billion in 2022.

Plans for 2024 FY

Transcorp Hotels planned to commission a 5,000-seater capacity event centre in Abuja by the first quarter (Q1) of 2024. Transcorp Hotels also plans to build a five-star hotel in the upmarket Ikoyi neighbourhood of Lagos.

The decision, the CEO had noted earlier this year is part of the broad plan to sustain post-pandemic recovery after covid lockdowns tipped the hospitality firm into a brief but substantial loss in 2020.

The facility is planned as a 300-room hotel towering 20 storeys alongside a 21-storeyed office block, with construction cost estimated at $110 million.

“We are expanding to Lagos, Ikoyi Glover and this is going to be phenomenal, a five-star hotel that offers accommodation, event space, restaurant, health & fitness, everything,” she had said.

Note that the shareholders of Transcorp Hotels resolved at the company’s annual general management in April to sell off its 100 percent equity stake in Transcorp Hotels Calabar Limited, which has been racking up losses for at least the last two years.

In 2023 financial year, the continued to maintain its strong leisure business, setting the pace with excellence in the delivery of both business and leisure offerings, as the importance of the leisure segment expands in the industry.

The Managing Director/CEO of Transcorp Hotels, Dupe Olusola had stated that “This consistent financial upswing reinforces our dedication to excellence and resilience in the face of economic challenges. We have remained nimble, adapting quickly to meet the dynamic preferences of our guests”.

According to Olusola, the Company continued to experience strong performance in its International Business Travel segment, as it took advantage of renewed investor confidence in the Nigerian economy as a new government resumed office.

Transcorp Hotels also continues to maintain its strong leisure business, setting the pace with excellence in the delivery of both business and leisure offerings, as the importance of the leisure segment expands in the industry.

Transcorp Hotels is one of Africa’s leading hospitality companies, committed to redefining hospitality standards.

The Company’s hotels include the award-winning Transcorp Hilton Abuja and Transcorp Hotels Calabar. It also owns Aura by Transcorp Hotels, an online platform for booking homes, hotels and memorable lifestyle experiences.