Transcorp reports N956m loss as COVID-19 hits hospitality business
Transnational Corporation Plc has reported a loss of N956.74 million for the quarter ended March 31, 2020 as its hospitality business took a hit from the COVID-19 pandemic.
The group saw its profit before taxation plunge to N137.26 million for the quarter from N2.55 billion in the same period a year ago. Its total comprehensive income stood at N2.09 billion at the end of the quarter ended March 2019.
Transcorp’s total assets reduced to N311.38 billion as of March 2020 from N313.13 billion in December 2019, while total liabilities fell to N203.60 billion from N204.39 billion, according to its unaudited financial statements obtained by Markets Reporters from the Nigerian Stock Exchange.
Its revenue is generated mostly from two key sectors: power, which contributes about 70 percent of its revenue, and hospitality, which contributes about 30 per cent.
The group said Transcorp Hotel Plc, one of its subsidiaries, started the year 2020 optimistic with detailed plans and budget to surpass the N20bn revenue performance achieved in 2019.
“With the global coronavirus pandemic, the hospitality industry has been negatively impacted,” it said.
Nigeria reported its first case of COVID-19 on February 27, 2020, with the index case being an Italian who returned from Milan, Italy to Lagos on February 25.
Transcorp noted that the country had witnessed an increase in confirmed cases which led to closure of airports and flights and an official lockdown of the Federal Capital Territory issued by the Federal Government to ensure the effective combat of the virus.
“All of these have negatively impacted the hotel and its business activities in this period. The company anticipates that the hotel’s future results of operations, including the results for 2020, will be materially impacted by the coronavirus outbreak,” it said.
The group, however, said given the speed and frequency of continuously evolving developments with respect to the pandemic, it could not reasonably estimate the magnitude of the impact on its results and its operations.
“If the outbreak continues on its current trajectory, such impact could grow and become material to its (the company) liquidity or financial position,” it added.
According to the group, the operations of Transcorp Power Limited, which is in the business of power generation, are not materially affected by the negative impact of the COVID-19 pandemic.
“The company continues to receive payments of its invoices under the Federal Government’s N600 billion Payment Assurance Facility. In addition, payments are made to suppliers and lenders as at when due,” it said.
