By Abubakar Yunusa
Post-tax profit at Femi Otedola’s Geregu Power came in 13.3 per cent stronger for the first nine months of the year when weighed up against the figure for the same period of last year.
The gains were recorded off the back of growth across its two key revenue streams.
Fairly stronger proceeds from both the energy sold and capacity charge lent the support that saw revenue 42.9 per cent up to N55.7 billion for the electricity producer.
The company has in February welcomed FEDA, a unit of Afreximbank, as its first substantial shareholder after it went public.
Mr Otedola, previously Nigeria’s second-richest person and a multisector investor with interests in maritime, banking and oil & gas, holds the company’s controlling stake.
What could have been a better bottom-line performance was particularly constrained by an upswing in impairment loss from the cash owed the comppany by trade debtors, having climbed nineteen times over to N3.1 billion in just twelve months.
Setting that sum aside curbed net profit, the unaudited financials of Geregu Power published on Wednesday showed, but other vicious dampeners in some way took their toll.
An expected credit loss estimated at N168.7 million from related party receivables remains vague at best with no details or explanation about the identity of the counterparty and the nature of the transaction provided in the notes to the financial statements.
Repair and maintenance of machinery and plant gulped N1.6 billion compared to only N89 million a year ago. And foreign exchange loss, the latest nightmare of manufacturers and import-dependent businesses in Africa’s largest economy, took N670.5 million of revenue.
Geregu Power is on the queue of companies aspiring to buy one of the state-owned power assets at the Bureau of Public Enterprises, where the bidding process is at its last lap.
The interest expense on the bond issued to secure the power plant and the money it spent to service bank loans together more than doubled to N8.5 billion.
Profit for the period rose to N11.4 billion from N10 billion a year prior. Geregu Power’s shares have yielded 128 per cent since the turn of year, trading at N339.5 per unit at 13:39 WAT in Lagos on Thursday.