Geregu Power rakes in 148.5% more in half-year profit, increases energy sales
Profit before income tax surged to N30.2 billion from N12.3 billion a year earlier. The stock has surged by 150 percent since the beginning of the year
Geregu Power reported a 148.5 percent increase in net profit for the first half of the year compared to the same period last year.
The company’s improved performance was driven by higher income from energy sales and capacity charges, its main revenue sources. This positive outcome could be attributed to the collaboration with Siemens earlier in the year to expand capacity.
Backed by Femi Otedola, who chairs the board of Nigeria’s oldest lender FBN Holdings, the electricity provider announced an agreement with Siemens in May to increase its current nameplate capacity to 1,200 megawatts.
This involves upgrading Gereru I, one of its major power plants, to 500 MW from 435 MW, as well as constructing a new 500 MW power plant using lower emissions turbines. Additionally, Geregu Power plans to establish combined cycle operations to generate an additional 200 MW, as stated in a May release.
In terms of financials, revenue for the period increased to N80.7 billion, a 32.5 percent rise based on the unaudited earnings report issued on Friday. Despite the overall strong performance, there was a notable downside which was the impairment loss on financial assets. This loss accelerated to N6 billion, chiefly due to a significant increase in long-due receivables from trade debtors.
On a positive note, profit before income tax surged to N30.2 billion from N12.3 billion a year earlier. The stock has surged by 150 percent since the beginning of the year, outperforming the Nigerian Exchange’s main stock index, which rose by 33 percent.
Moreover, Geregu Power’s stock has outpaced the NGX 30, an index tracking the thirty most capitalized and liquid equities on the bourse, which increased by over 27 percent. Notably, the share price of Geregu Power has remained unchanged at N1000 per unit since 4th March.
