Transcorp Hotels’ Q3 profit falls 19% to N5bn as cost rises

Transcorp Hotels Plc’s profit after tax (PAT) fell by 18.6 per cent to N5.00 billion in the third quarter of 2026, from N6.14 billion in the corresponding period of 2025, as higher operating expenses and finance costs reduced the impact of increased revenue.

The company’s unaudited financial statements for the nine months ended September 30, 2026, filed on the Nigerian Exchange Limited (NGX) showed that revenue for the third quarter rose by 2.7 per cent to N25.04 billion, compared with N24.37 billion a year earlier. However, operating expenses increased to N9.97 billion from N7.67 billion, while finance costs rose to N2.85 billion from N957.69 million.

Consequently, operating profit declined by 13.1 per cent to N9.56 billion from N11.00 billion, while profit before tax fell by 13.2 per cent to N8.83 billion from N10.18 billion. The increase in operating expenses and finance costs came despite a rise in gross profit to N19.34 billion in the third quarter, compared with N18.48 billion in the same period last year.

For the nine months, however, Transcorp Hotels recorded an increase in profit after tax to N15.54 billion from N14.82 billion in the corresponding period of 2025. Profit before tax rose slightly to N22.53 billion from N22.40 billion, supported partly by higher finance income. Revenue for the nine-month period declined by 2.6 per cent to N69.46 billion from N71.30 billion, while gross profit fell to N53.32 billion from N54.05 billion.

A breakdown of revenue showed that room earnings, the company’s largest revenue source, declined to N46.29 billion from N46.65 billion. Revenue from food and beverages also fell to N19.27 billion from N21.02 billion, while event centre hall rental income dropped to N981.52 million from N1.15 billion.

The results also showed a significant increase in finance costs, which more than doubled to N5.91 billion from N2.80 billion in the corresponding period of 2025. Finance income, however, rose to N4.46 billion from N520.68 million, partly offsetting the higher financing costs.

The company’s borrowings increased sharply to N54.96 billion as of September 30, 2026, from N10.52 billion at the end of December 2025. The increase followed the receipt of N44.48 billion in new borrowings during the nine-month period, while repayments of borrowings amounted to N3.43 billion. The higher debt position coincided with a reversal in operating cash flow. Transcorp Hotels recorded a net cash outflow of N15.93 billion from operating activities in the nine months, compared with an inflow of N18.82 billion in the corresponding period of 2025.

Despite the operating cash outflow, cash and cash equivalents increased to N20.34 billion at the end of September, from N15.55 billion at the beginning of the year.

The increase was supported by net cash generated from financing activities of N27.02 billion, including proceeds from new borrowings.

Transcorp Hotels paid N13.32 billion in dividends during the nine months, compared with N7.58 billion recorded for the full year ended December 2025. The payments included the 2025 final dividend of N1.20 per share and the 2026 interim dividend of 10 kobo per share.

Basic earnings per share increased to 152 kobo from 145 kobo in the corresponding period of 2025, reflecting the improvement in nine-month profit despite weaker revenue.

As of September 30, 2026, the company’s total equity stood at N97.55 billion, while its total assets were reported at N206.82 billion.