Transnational Corporation Of Nigeria Plc · NSENG:TRANSCORP
Transnational Corporation Of Nigeria — Q3 2020 Earnings Presentation
50 slides from Transnational Corporation Of Nigeria's earnings presentation, November 2020
Slide 1: Presentation to Investors & Analysts
Presentation to Investors & Analysts For the period ended September 30th, 2020 1
Slide 2: Disclaimer
Disclaimer • From time to time, Transnational Corporation of Nigeria Plc (“Transcorp”) and its subsidiaries (“the Group”) make written and/or oral forward- looking statements in presentations (including this presentation) and other communication. In addition, representatives of the Group may make fo
Slide 3: Presentation Outline
Presentation Outline 04 10 13 16 37 43 Group CSR, Awards Operating Financial Segment Overview Outlook & Environment Performance Review Recognitions www.transcorpnigeria.com 3
Slide 4: Overview
Lranscorp Overview
Slide 5: About Transcorp
About Transcorp A diversified conglomerate… Listed Company with approximately 300,000 Shareholders with commanding presence in the Power, Oil & Gas and Hospitality sectors. With an Aggressive Growth Agenda With a Purpose of Improving Lives, Transforming Nigeria Deeply rooted values are the 3Es of Ex
Slide 6: Our Investment Philosophy
Our Investment Philosophy Guided by a sound investment philosophy Long-term Shareholder Returns Corporate Operational Governance Efficiency Growth Capacity Return on Investment Socio-economic Impact www.transcorpnigeria.com 6
Slide 7: The Group at a Glance
The Group at a Glance …in strategic sectors of the economy With eyes set on generating 25% of Through ownership of choice assets and the total power requirement in provision of exceptional service, Transcorp We are on a mission to ramp up Nigeria, Transcorp Power Limited Hotels Plc is redefining hos
Slide 8: Our Journey
Our Journey Our achievement milestones speak volumes PHASE ONE PHASE TWO PHASE THREE 2004 - 2011 2012 - 2018 2019 - 2025 POWER ▪ 2012: Transcorp Ughelli Power ▪ 2019: Emerged preferred bidder for AFAM ▪ 2015: Merger of Transcorp Ughelli power plant. emerges preferred bidder for Ughelli Power Limited
Slide 9: Management Team
Management Team …a team of experienced professionals GROUP LEADERSHIP TRANSCORP POWER LIMITED TRANSCORP HOTELS PLC Owen Omogiafo Mutiu Bakare Gabriel Nkanga Christopher Ezeafulukwe Dupe Olusola Director of - President/GCEO Group Chief Finance MD/CEO MD/CEO Officer Resources Chike Anikwe Oluwasayo Ak
Slide 10: Operating Environment
Lranscoroe Operating Environment
Slide 11: Global Economic Continues to be impacted by COVID-19
Global Economic Continues to be impacted by COVID-19 World economy to begin recovery in 2021 OECD Interim Projected GDP Growth Global GDP Growth Rate 2019 2020E 2021F as at Q3 2020 World Output 2.6 -4.5 5.0 Australia 1.8 -4.1 2.5 Canada 1.7 -5.8 4.0 Canada Russia Euro Area 1.3 -7.9 5.1 -13%* -3.6% U
Slide 12: Key Macro Indicators
Key Macro Indicators Performance highlights for the economy AS EXPECTED, GDP GROWTH WENT INTO THE RED IN Q2 2020 AS OIL SECTOR SHRINKS EXTERNAL RESERVES MARGINALLY INCREASE AS OIL PRICES STABILISE IN THE MARKET 2.5 4.00% 80 50 Crude Oil Production (mbpd) 70 2.00% 40 2 Foreign Reserves 60 Crude Oil P
Slide 13: Group Financial Performance
Group Financial Performance 13
Slide 14: Financial Highlights
Financial Highlights Income Statement Q3 2020 Q3 2019 (₦’ Million) (₦’ Million) Revenue 54,378 58,278 Gross Profit 22,723 26,956 Operating Profit 15,538 17,083 Finance Cost (11,680) (10,169) Profit Before Taxation 2,020 7,356 Profit After Taxation 1,746 6,744 Statement of Financial Position Q3 2020
Slide 15: Group Revenue Breakdown
Group Revenue Breakdown Contribution of subsidiaries to revenue… Revenue Breakdown by Subsidiaries Q3 2020 Contribution Q3 2019 Contribution (₦’ Million) (₦’ Million) Transcorp Power 47,587 86% 43,601 75% Transcorp Hotels 6,791 14% 14,677 25% TOTAL 54,378 100% 58,278 100% COMMENT ▪ Group revenue dec
Slide 16: Segment Review: Power
Lranscore Segment Review
Slide 17: Power Sector overview
Power Sector overview 5,520Mw2 12,500Mw1 Peak generation recorded in Oct.2020 Installed capacity A population of more than 45%4 of the population or 88 195 million people million people have some level of access to grid electricity. 4,000Mw1 8,100Mw2 Average daily Current capacity generation (TNC) P
Slide 18: Key challenges in the power sector
Power Key challenges in the power sector INADEQUATE INFRASTRUCTURAL LIQUIDITY TARIFF SHORTFALL GAS SUPPLY CONSTRAINTS CRUNCH Pipeline vandalism, The rising cost of The lack of proper Operators across the weather and supplying electricity infrastructural facilities value chain continue infrastructura
Slide 19: Sectoral developments and improvements
Power Sectoral developments and improvements 1 3 New Service-based tariff NESI Distribution Franchising NERC-issued Order marked NERC issued the guidelines on commencement of the distribution franchising in the service-based tariffs which Nigerian Electricity Supply is to reduce the revenue Industry
Slide 20: Our strategy amidst the power sector issues: Gas supply
Power Our strategy amidst the power sector issues GAS SUPPLY WAY FORWARD ▪ Transcorp Power gas supply offtake in Q3 remained ▪ Our partnership with the Nigerian Gas Company (NGC) stable even in the face of challenges from our gas and our gas suppliers has continued to ensure the producer facility. p
Slide 21: Our strategy amidst the power sector issues: Transmission
Power Our strategy amidst the power sector issues TRANSMISSION WAY FORWARD ▪ In Q3 2020, TPL received and complied with a number of ▪ We will continue to monitor and follow-up on the on-going ramp down instructions from the National Control Centre, power infrastructure rehabilitation projects across
Slide 22: Power Financial highlights
Power Financial highlights Income Statement COMMENT Q3 2020 Q3 2019 • Revenue grew by 9.14% year-on-year (₦’Million) (₦’Million) on the back of 26.01% increase in 47,587 43,601 revenue on capacity charge. Revenue Gross Profit 18,617 15,926 • In the same vein, Operating profit improved by 21.50% as a
Slide 23: Power Key performance metrics
Power Key performance metrics Capacity Utilization vs Gas Consumed 80% 1.5 60% 1.0 40% 0.5 20% 0% 0.0 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Capacity utilization Gas Consumed (Rebased) Available vs Generated Capacity (MW) 800 80% 600 60% 400 40% 200 20% 0 0% Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3'
Slide 24: Segment Review: Hospitality
Segment Review Hospitality 24
Slide 25: Status and Future of the Sector since COVID-19
Hospitality Status and Future of the Sector since COVID-19 6-Month Lockdown resulted in disruption in hospitality value 73% of consumers chain, including hotels, restaurants, are taking note of brands that are tourism. Countries with tourist attractions making attempts at sustaining the 50% must spe
Slide 26: Hospitality Key performance metrics
Hospitality Key performance metrics Occupancy Rate % 40.0 32.9 23.2 18.2 20.0 10.9 5.2 6.7 0.0 April 2020 May 2020 June 2020 July 2020 Aug 2020 Sept 2020 THP Average Daily Rate ₦ Revenue Per Available Room ₦ 81,632 83,132 81,921 80,154 82,889 27,232 76,256 65,791 18,568 54,406 42,177 46,983 38,226 3
Slide 27: Strategic Initiatives to mitigate COVID-19 impact
Hospitality Strategic Initiatives to mitigate COVID-19 impact Promotions, Guest Engagement Drive-In Events and Group Conference Events Continous promotion of our meeting simplified This product was launched in May for ‘top of mind’ awareness product offerings such as the weekend for the hotel amongs
Slide 28: Hospitality Financial highlights
Hospitality Financial highlights Income Statement COMMENT Q3 2020 Q3 2019 (₦’Million) (₦’Million) • Revenue declined by 54% year-on- year due to the lingering effect of Revenue 6,443 14,042 COVID-19 on the business. However, through the various Gross Profit 4,137 10,605 initiatives implemented to re
Slide 29: Business Updates
Business Updates • We have seen improvement in room revenue which was majorly driven by our transient and group segments as well as our continuous marketing campaign of hotel offerings including; Weekend Staycation to attract both Abuja residents and potential guests from other states and different
Slide 30: Business Updates
Business Updates • We received the TripAdvisor 2020 Travelers’ Choice Award Certificates for the Hotel and Bukka Restaurant. Also, our hotel was recently honored with four awards for the sixth consecutive year at the 27th World Travel Awards. • As part of our strategy to improve operational efficien
Slide 31: Other Strategies and Outlook
Other Strategies and Outlook • We will continue to pursue our strategy on asset light business model. • We will continue sweating our existing assets through operational efficiencies. • Continuous market search for new businesses and revival of businesses lost during the lockdown. We remain positive
Slide 32: Segment Review: Oil & Gas
Segment Review Oil & Gas 32
Slide 33: Major Energy indicators
Oil and Gas Major Energy indicators $37.78 $800Mn/Year 57 fields Estimated total lost/foregone Number of marginal undeveloped Average brent crude oil price revenue from gas flaring per fields being auctioned in the for the month of November year. Marginal Bid Rounds, 2020 2020. 8.93% m XXX 1.81 MBPD
Slide 34: Challenges hindering the sector in Nigeria
Oil and Gas Challenges hindering the sector in Nigeria… The Petroleum Industry Bill (PIB) 2020 has suffered several delays. However, it has passed the first reading at the Senate and it is expected that both houses of National Assembly, the Senate and House of Representatives would adopt expedited p
Slide 35: Key progress on the OPL281 asset
Oil and Gas Key progress on the OPL281 asset… OPL 281 Budget Approval Resolution of SACOIL legal dispute - Approval of 2020 OPL 281 Budget - Transcorp entered an agreement and Work Programme by NNPC with Efora Energy Limited and SacOil 281 Nigeria Limited to settle - Held all the governance meetings
Slide 36: OPL Notional Development Plan
OPL 281 Notional Development Plan Our plan… Increase production of the hydrocarbons (oil & gas) depending on drilling results; Site Survey and Location Acquire 3D Seismic Data Expand gas productions Preparation Identification of competent Drilling of second well Conversion of OPL to OM
Slide 37: Outlook
Lranscorp Outlook
Slide 38: Q4 2020 Outlook
Q4 2020 Outlook Guidance for future performance… Q3 2020 Q4 2020 Business Actual Target Average (MW) 458 458 Available Capacity Power Average (MW) 317 346 Generated Capacity ADR (₦) 81,614.2 78,792.4 Hospitality Occupancy (%) 24.8% 37.6% RevPAR (₦) 20,218 29,665 www.transcorpnigeria.com 38
Slide 39: Afam Power GenCo Acquisition Update
Afam Power GenCo Acquisition Update 39
Slide 40: Afam Acquisition: SSPA Signed
Afam Acquisition SSPA Signed… Transcorp Consortium has signed agreement for 100% acquisition of Afam Power Plant with a 1000MW installed capacity at an acquisition cost of N105.3bn “We have seen the progress that Transcorp has made with the Ughelli Power Plant in raising the operational capacity sig
Slide 41: Afam Acquisition: Looking forward
Afam Acquisition Looking forward… Payment of Balance 75% Acquisition Early revenue due to early takeover Delivery of Cost Afam Three Fast Takeover of Power Payment of 25% the Plant Utilization of Afam Three Fast Power of Acquisition for the stabilization and support of Cost the national grid. With t
Slide 42: Afam Acquisition: Other investment attractiveness
Afam Acquisition Other investment attractiveness… Sufficient Evacuation Gas Availability Capacity Eligible Customer Opportunity Strategic Fit Cost-efficient Capacity Recovery www.transcorpnigeria.com 42
Slide 43: CSR, Awards & Recognition
Lranscoroe CSR, Awards & Recognition
Slide 44: CSR Focus Areas
CSR Focus Areas E Transcorp Social Impact Pillars ntrepreneurship and Empowerment ducation nvironment In the period under review, we continued to focus on Improving Lives and Transforming Nigeria by investing in the sustainable development of our operating environment through the 3E pillars of our c
Slide 45: Awards
Awards Transcorp Hilton Abuja has been recognized as the winner of Transcorp Hilton Abuja received two of the World Travel Awards for six consecutive years in the the prestigious TripAdvisors 2020 following categories: Travellers’ Choice Award certificate for its Hotel services and the Bukka o Afric
Slide 46: Recognition
Recognition In September, Chairman of Transcorp, Mr. Tony O. Elumelu CON, was recognized as one of #Time100 Most Influential People of 2020 following his visionary leadership and success as an entrepreneur, investor across Africa The Chairman of Transcorp, Mr. Tony O. Elumelu CON was conferred with
Slide 47: Recognition
Recognition • President/CEO of Transcorp, • The General Manager of Owen Omogiafo, was • President/CEO of Transcorp, Transcorp Hotels Calabar was recognized as the Nigerian Owen Omogiafo was recognized as one of the top Stock Exchange & Business honoured as the Outstanding 100 tourism personalities i
Slide 48: Questions
Lranscore Questions
Slide 49: Contact
Contact: Mutiu Bakare mutiu.bakare@transcorpnigeria.com Florence Nasamu florence.nasamu@transcorpnigeria.com Oluwatobiloba Ojediran oluwatobiloba.ojediran@transcorphotelsplc.com 49
Slide 50: Thank You
Lranscorp Thank You
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