Transcorp Power profit falls, pays dividend amid grid strain
Transcorp Power’s first-half profit fell 6.4% as transmission vandalism capped revenue, but cost cuts propped up margins while surging receivables and vanishing cash raised balance sheet concerns.
Transcorp Power Plc posted a pre-tax profit of N54.99 billion for the first half of 2026, a 6.37% decline from the prior year, while declaring an interim dividend of N1.50 per share. The payout is scheduled for July 23 to shareholders on the register as of July 20.
A weak second quarter drove the overall decline, with Q2 pre-tax profit falling 61.11% quarter-on-quarter to N15.40 billion. The earnings dip stems from an inability to fully monetise generated electricity. Management attributed the top-line contraction to recurring transmission line vandalism, which constrained the evacuation of available capacity.
Revenue from energy delivered, the company's largest revenue stream, fell to N138.94 billion from N150.80 billion. Capacity charges dropped to N43.02 billion from N55.00 billion, while revenue from local customers declined to N116.66 billion from N146.77 billion. A modest increase in international customer revenue to N65.30 billion from N59.04 billion provided only a partial offset.
Profitability was shielded by aggressive cost reductions. Cost of sales fell to N112.15 billion from N128.18 billion, driven largely by a sharp drop in repairs and maintenance expenses to N4.52 billion from N13.99 billion. CFO Evans Okpogoro noted that these efforts lifted gross margin to 38.4% and operating margin to 30.6%.
Beneath the resilient margins, the balance sheet shows signs of stress. Cash and cash equivalents plummeted 69.91% to N667.93 million. Simultaneously, trade and other receivables ballooned to N529.42 billion from N468.57 billion, and total interest-bearing borrowings more than doubled to N63.63 billion.
The equity market has priced in these headwinds. Shares have fallen 20% year-to-date to N245.50 as of July 17, giving the company a market capitalisation of N1.84 trillion. MD/CEO Peter Ikenga expressed confidence the company would "recover the ground lost in H1 and finish FY 2026 stronger," but investors will need to see grid constraints ease before the valuation recovers.
