Friday, February 23, 2024

Energy sales, capacity charges lift Geregu Power’s revenues by 42% in Q3 2023

BY FESTUS OKOROMADU, ABUJA

The Board of Directors of Geregu Power Plc, Nigeria’s leading electricity generation company, has attributed the improved revenue generation for its third quarter ended September 30, 2023 to earnings from energy sales and capacity charges, among others.

The firm’s interim financial result posted by the Nigerian Exchange Limited shows revenue for the period stood at N55.7 billion representing 42 percent increase from N39 billion achieved in the corresponding period of 2022.

Analysis of the revenue performance shows that during the third quarter a significant surge in key revenue streams, contributing to the improved result.

For instance, the revenue generated from energy sales in the three months ending in September 2023 surged from N3.2 billion in the same quarter last year to an impressive N13.1 billion.

This substantial increase played a pivotal role in boosting the total energy sales figure to N34.7 billion, a notable rise from N24.77 billion recorded over the course of 9 months.

Furthermore, the company reported earnings of N7.9 billion from capacity charges, compared to N1.9 billion for the same period last year.

Likewise, the total capacity charges for the first nine months saw a remarkable increase, reaching N20.9 billion, up from N14.2 billion.

The power generating company also exhibited a strong cash flow during the period under review as net cash flow from operations rose to N37.5 billion, up from the N4.3 billion reported during the same period in 2022.

The company successfully repaid a net debt of N18.5 billion and also settled its bond coupon expenses, totaling N5.7 billion.

Additionally, Geregu Power distributed dividends of N20 billion, sourced from its 2022 profits, further highlighting its strong cash flow position and commitment to returning value to shareholders.

The company’s robust financial position is evident in its total cash holdings, which stood at N49.3 billion at the end of the period.

This substantial cash reserve not only bolsters its financial stability but also provides vital support for potential investments, including the acquisition of the new power plant it is currently bidding for.

However, the company’s expenses also witnessed a hike during the period due to escalating inflation as well as foreign exchange. For instance, the firm reported an impairment loss of N3.1 billion, a significant increase from the N162 million recorded in the same period in 2022.

This impairment reflected provisions made for energy sold but yet to be received in due time.

Administrative expenses also rose from N2.7 billion in the previous year to N5.8 billion during the period under review, due to inflation and exchange rate depreciation.

Interestingly, the firm reported a pre-tax profit of N17.4 billion, implying a 25.3 percent growth when compared to the N13.9 billion reported in the corresponding quarter of 2022.

In terms of profit after tax for the period under review, Geregu Power achieved N11.3 billion, up from N10 billion in the same period last year.

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