Olufemi Adeyemi 

Transcorp Hotels Plc, a prominent player in the hospitality industry, has made a notable announcement regarding its first interim dividend since its official listing on the Nigeria Exchange Limited (NGX) in 2015. This significant milestone underscores the company's commitment to rewarding its esteemed shareholders and reflects the robust financial performance achieved over the years.

Several key factors have contributed to Transcorp Hotels Plc's success. Notably, the company has experienced consistent revenue growth, driven by strategic initiatives and a steadfast focus on delivering exceptional hospitality experiences. Additionally, the establishment of high hospitality standards across Africa has solidified Transcorp Hotels Plc's position as a leading provider of premium accommodation and services. 

This is exemplified by the renowned Transcorp Hilton, Nigeria's premier hospitality venue, and the innovative digital platform, Aura by Transcorp Hotels, which has revolutionized the guest experience.Transcorp Hotels joins Transcorp Power Plc and Transcorp Corporation Plc in distributing interim dividends to shareholders, a decision supported by robust profit generation and a strong revenue performance. 

The management has declared an interim dividend of N0.10 per 50 kobo ordinary share, amounting to N1.02 billion for the first half of the year ending June 30, 2024.

For Transcorp Power, an interim dividend of N1.50 kobo per share has been proposed, while shareholders of Transcorp Plc will receive an interim dividend of N0.10 kobo per 50 kobo ordinary share. The total interim dividends declared by the three companies amount to approximately N16.34 billion, coinciding with a profit after tax of N96.18 billion for the reviewed period, reflecting a remarkable increase of about 224.84 percent compared to the N29.61 billion profit after tax recorded in the same period of 2023.

Transcorp Hotels’ H1 2024 results and accounts performance demonstrated sustained exponential growth compared to the full-year accounts of 2023. Revenue reached N29.7 billion in H1 2024, representing an impressive 61% increase from the N18.5 billion reported in H1 2023.

Factors Influencing Business Expansion

A comprehensive analysis of the company’s financial performance during the first half of 2024 revealed that room services and food & beverage sectors emerged as the primary catalysts for revenue growth. Specifically, room services revenue experienced a substantial increase, rising from N12.26 billion in H1 2023 to an impressive N19.66 billion in H1 2024. Similarly, revenue generated from food & beverage operations demonstrated a significant upward trajectory, moving from N5.03 billion in H1 2023 to a commendable N8.67 billion in H1 2024.

During the reviewed period, the company's occupancy rate rose to 81 percent in the first half of 2024, compared to 77 percent in the first half of 2023.

Revenue per Available Room (RevPAR) saw a significant increase of 57 percent, reaching N162,999, up from N103,646 in the same timeframe of 2023. The cost of sales amounted to N8.53 billion, reflecting a 71.09 percent rise from N4.99 billion reported in the first half of 2023.

This increase was primarily attributed to food and beverage costs, which reached N5.37 billion in the first half of 2024, compared to N3.18 billion in the first half of 2023.

Additionally, non-core business income for the first half of 2024 was N4.23 billion, marking a substantial increase of 338.74 percent from N964.75 million in the first half of 2023.

Amid rising inflation, Transcorp Hotel reported operating expenses of N13.28 billion, which represents a 50.61 percent increase from N8.82 billion in the first half of 2023.

Fiscal Year 2023 and First Half of 2024 Comparison

A further analysis revealed that the profit generation in the first half of 2024 was a direct reflection of the performance in the 2023 financial year. Transcorp Hotels’ profit before tax for the first half of 2024 amounted to 10.5 billion Nigerian Naira, representing a significant increase of approximately 192% compared to the 3.6 billion Nigerian Naira reported in the first half of 2023. Similarly, the profit after tax experienced substantial growth, rising to 6.6 billion Nigerian Naira in the first half of 2024, which is approximately 157% higher than the 2.6 billion Nigerian Naira reported in the first half of 2023. 

In the financial year ending December 31, 2023, the company maintained its profitability and continued to distribute dividends to shareholders despite facing challenges in the domestic macroeconomic environment.

The organization reported a strong performance, attributed to the effective management strategies and innovations implemented by its leadership.

The group achieved a remarkable bottom-line result, recording a profit before tax of N9.48 billion in 2023, which represents a 104.6 percent increase from N4.663 billion in 2022. This significant rise in profit before tax is primarily due to a more substantial increase in revenue compared to the growth in cost of sales.

With tax expenses amounting to approximately N3.23 billion in 2023, up from N1.77 billion in 2022, Transcorp Hotels concluded the financial year with a profit after tax of N6.25 billion, compared to N2.86 billion reported in the previous year.

In light of this improved performance, the Board of Directors has proposed an interim and final dividend of N2.05 billion (2022: N1.33 billion), which is equivalent to 20 kobo per ordinary share for the year ended 2023.

Transcorp Hotel is dedicated to enhancing its revenue and is set to unveil a purpose-built event center with a capacity of 5,000, designed to accommodate local and international entertainment, conferences, and exhibitions.

This state-of-the-art facility, situated within the grounds of Transcorp Hilton Abuja, is anticipated to open in the latter half of 2024.

The Managing Director/CEO of Transcorp Hotels, Dupe Olusola, expressed her pride in the team's dedication, resilience, and steadfast commitment to excellence in delivering an unmatched hospitality experience.

In response to the performance in the first half of 2024, she noted that the company has consistently excelled, achieving record financial results in the first quarter and further elevating its performance in the second quarter, culminating in a remarkable 61 percent revenue growth for the half-year period.

Olusola highlighted that the Revenue Per Available Room surged by nearly 60 percent compared to the first half of 2023, driven by increased demand from both group and transient guests at Transcorp Hilton Abuja, alongside a strengthening leisure business. She emphasized the company's focus on maintaining high standards, operational excellence, exceptional guest experiences, and financial discipline, instilling confidence in their capacity for continued growth aligned with strategic objectives and delivering long-term value to stakeholders.

Additionally, she expressed enthusiasm for the forthcoming launch of the 5,000-capacity event center, which is expected to draw regional and international events to Abuja, thereby enhancing Nigeria's share of the global Meetings, Incentives, Conferences, and Exhibitions (MICE) industry, valued at $802.59 billion in 2023, and contributing to the nation's economic development.

The Chairman of the Board of Directors, Emmanuel Nnorom, emphasized that the company’s outstanding performance during the first half of the year underscores its resilience and strategic vision in navigating the dynamic hospitality industry.

He further stated that the interim dividend serves as a testament to the company’s robust financial health and unwavering commitment to rewarding its investors. It also signifies the company’s confidence in its growth trajectory. Looking ahead, Transcorp Hotels remains confident in its ability to continue thriving and setting new industry benchmarks, in line with its mission of redefining hospitality in Africa.