Transcorp posts NGN1.1 billion loss in 2016, suffers from Forex debt

Transnational

One of the companies badly beaten by Nigeria’s recession is Transcorp.

On the topline, it looked like a positive result, but a deeper scan on the result shows that Transcorp had one of the worst year last year.

Its full year revenue rose to NGN59 billion compared to NGN40 billion recorded last year. However, this gain was depleted by its cost of sales which rose to NGN29 billion versus NGN16,4 billion expended in 2015.

Gross profit rose to NGN30 billion versus NGN24 billion in 2015. However, the company’s books starts showing red when you look at its loss before tax of NGN5,9 billion. In the previous year, Transcorp booked a profit before tax of NGN3,3 billion.

The major headache for Transcorp is its forex loans that took a hit from the crash of the Naira. Total Foreign exchange loss on financing activities rose to NGN18,7 billion compared to NGN6,0 billion in the year before.

It is therefore a no-brainer that the company booked a net loss of NGN1,1 billion compared to NGN2,0 billion profit in 2015

Transcorp Nigeria plc   said its total assets for the period was NGN232.1 billion compared to NGN202.8 billion acquired same period in 2015. It recorded total liabilities of NGN145.7 billion in 2017 compared to NGN115.3 billion recorded in 2015.

Transcorp will require more borrowing to shore up its capital base. Total cash at hand fell to NGN2,3 billion. This is a huge burn in cash when compared to its cash position of NGN14,4 billion in 2015.