Femi Otedola Geregu Power Boosts EPS by 45.48%, Valuation Rises Sharply

Femi Otedola Geregu Power Boosts EPS by 45.48%, Valuation Rises Sharply
Femi Otedola

Femi Otedola Geregu Power Boosts EPS by 45.48%, Valuation Rises Sharply


As part of the listing requirements, Geregu Power Plc, a company chair by Femi Otedola, has released its financial statement for 2021 which shows its total assets and equity capital declined year on year because the company paid N37.582 billion as dividends to shareholders while profit for the period was N20.550 billion.

The audited financial statement submitted to market regulators indicates that Geregu Power Plc.’s earnings per share jumped 45.48% year on year to N2,055 from N1,412.54.

The power generating company recently listed on the Nigerian Exchange has its share priced at N100 on 2.5 billion outstanding shares. However, barely a week after it was listed on the Exchange, Ticker: Geregu has gained N20.90 on each share traded on the local bourse. Its market valuation has increased to N302.250 billion from N250 billion.

In 2021 result, the power company reported a better gross profit margin which printed at 47%, 400 basis points higher than 43% reported in 2020 amidst higher energy pricing implementation.

The company’s audited financial statement shows that total assets declined to N114.821 billion in 2021, 6.70% below N123.066 billion reported in the comparable year in 2020.

The company’s income statement shows that profit for 2021 increased significantly to N20.550 billion, translating to 45.49% year-on-year growth amidst increased energy costs in Nigeria.

In the preceding year, Geregu Power Plc had declared a profit after tax of N14.125 billion on its continuing operation, according to its audited financial statement released today.

The higher profitability the company posted was supported by strong topline growth reported in 2021. Geregu Power Plc revenue inched upward to N70.956 billion, up 32.19% year on year from N53.676 billion sales level reported in 2020.

The breakdown of the company revenue shows that both energy sold in the period and capacity charge surged. The audited report indicates that the company reported N45.696 billion as income from energy sold, up 31.17% when compared with N34.837 billion in 2020.

Also, income from capacity charged increased to N25.260 billion in the year, which was 34.08% higher than N18.839 billion reported in 2020 amidst the pandemic.

Higher costs of operation were noted in the audited statement, driven by rising headline inflation in the country – a development that actually impacted energy costs across sectors of the economy.

Worsened by increased expenses on gas supply and transportation, Geregu Power’s costs of sales in 2021 printed at N33.342 billion, up by 45.97% year on year from N22.841 billion in the comparable year.

Though supporting higher sales costs reported in the audited statement, Geregu Power Plc.’s plant depreciation charge in 2021 was nearly stable at N4.426 billion in the financial year 2021 from N4.154 billion 12-month earlier.

In 2021, the company’s debt-to-capital ratio increased to 48% year on year from 37% in 2020 as total liabilities grew at a faster pace than asset growth.

Contributing 80% capital structure, Amperion Power Distribution Company Limited owns the largest share in Geregu Power Plc. Also, the Bureau of Public Enterprises owns 10.2% of the power generating company’s assets while the Ministry of Finance contributed 8.2%.

In 2021, Geregu Power loans increased significantly. The company obtained N10 billion revolving facility from First Bank of Nigeria at 13.5% to augment working capital.

According to the company’s report, the collateral for the loan from First Bank are all assets debenture of the Group Parent Company; Charge on the 80% shares of Geregu Power Plc owned by Amperion. READ:What transpired during Obasanjo, Tinubu’s meeting

This also includes Corporate Guarantee of Calvados Global Services Limited, Personal Guarantee of the Chairman and domiciliation of all the Company`s receivables account to First bank while the facility subsists.

# Femi Otedola Geregu Power Boosts EPS by 45.48%, Valuation Rises Sharply#