Transcorp Hotels Plc reported a 4.8 percent increase in profit for the nine months ended September 2026, supported by lower operating costs and higher finance income, even as revenue declined and borrowing costs more than doubled.
The hospitality group’s unaudited financial statements show that profit after tax rose to N15.54 billion from N14.82 billion in the corresponding period of 2025, while revenue fell 2.6 percent to N69.46 billion from N71.30 billion.
Operating profit declined to N24.36 billion from N24.71 billion, while profit before tax edged up to N22.53 billion from N22.40 billion, reflecting the contribution of finance income to the group’s overall earnings.
Third-quarter earnings come under pressure
The company’s performance weakened in the third quarter, with profit after tax falling 18.6 percent to N5.00 billion in the three months ended September 2026, compared with N6.14 billion a year earlier.
Revenue, however, increased 2.7 percent to N25.04 billion from N24.37 billion, while gross profit rose 4.6 percent to N19.34 billion.
The increase in revenue was not sufficient to offset higher operating expenses, which climbed 30 percent to N9.97 billion from N7.67 billion. Consequently, operating profit declined 13.1 percent to N9.56 billion from N11.00 billion.
Finance costs increased almost threefold to N2.85 billion from N957.69 million, while unrealised foreign exchange losses rose to N349.16 million from N61.99 million.
Although finance income increased to N2.47 billion from N195.82 million, profit before tax still fell 13.2 percent to N8.83 billion from N10.18 billion.
Rooms remain the biggest revenue driver
Revenue from rooms remained Transcorp Hotels’ largest income source, generating N46.29 billion in the nine months to September, although this was slightly below the N46.65 billion recorded in the corresponding period of 2025.
Food and beverage revenue also declined, falling 8.3 percent to N19.27 billion from N21.02 billion.
Together, the two categories accounted for the overwhelming majority of the group’s revenue, underscoring its dependence on accommodation and food services.
Other revenue streams delivered mixed results. Event centre hall rental income declined to N981.52 million from N1.15 billion, while shop rental revenue was broadly unchanged at N1.36 billion.
Service charge income increased to N690.64 million from N396.82 million, while recreation services revenue rose to N443.25 million from N312.46 million. Secretarial services income also increased to N63.66 million from N32.41 million.
The company operates in Nigeria’s hospitality market, providing accommodation, meeting rooms and leisure facilities. Its portfolio also includes the Transcorp Centre, a 5,000-capacity venue commissioned in 2025 to host conferences, corporate events and social gatherings.
Borrowings surge to N54.96bn
One of the most significant changes in the financial statements is the sharp increase in interest-bearing borrowings.
Total borrowings rose to N54.96 billion as of September 30, 2026, from N10.52 billion at the end of December 2025. This represents an increase of approximately 422 percent.
The increase was driven largely by a N42.92 billion loan, which the financial statements list at N49.19 billion at the reporting date, alongside an existing N12.75 billion loan.
The newly listed loan carries an interest rate of 22 percent and a maturity date of March 17, 2031. The existing N12.75 billion loan carries a 10 percent interest rate and matures on May 31, 2029.
The company recorded N5.91 billion in finance costs during the nine months, up from N2.80 billion a year earlier. Interest on debt accounted for N5.51 billion of the 2026 figure, compared with N1.40 billion in the previous corresponding period.
Finance income, however, increased significantly to N4.46 billion from N520.68 million, largely reflecting interest on intercompany loan receivables, which contributed N4.19 billion.
Operating cash flow turns negative
Net cash used in operating activities stood at N15.93 billion in the nine months to September 2026, reversing from a positive N18.82 billion in the corresponding period of 2025.
Cash generated from operations was negative N11.27 billion, compared with positive N21.79 billion a year earlier, while income tax payments increased to N4.66 billion from N2.97 billion.
The company also spent N5.92 billion on investing activities, including N6.28 billion on property, plant and equipment.
However, financing activities generated N27.02 billion, supported by N44.48 billion in borrowing proceeds. The group also paid N13.32 billion in dividends during the period.
Consequently, cash and cash equivalents increased by N5.17 billion to N20.34 billion at September 30, 2026.
Assets expand as liabilities increase
The group’s total assets rose to N206.82 billion at September 2026, from N159.91 billion at the end of December 2025.
Property, plant, and equipment increased to N127.69 billion from N124.86 billion, while trade and other receivables surged to N50.53 billion from N11.00 billion.
Total liabilities increased to N109.27 billion from N64.68 billion over the same period, reflecting the increase in borrowings and other obligations.
Shareholders’ equity stood at N97.55 billion, compared with N95.23 billion at the end of 2025.
The company closed its last trading day on Friday at N290.50 per share on the Nigerian Stock Exchange (NGX). Transcorp Hotels began the year with a share price of N170.90 and has since gained 70 percent on that price valuation, ranking it 31st on the NGX in terms of year-to-date performance.
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Chinwe Michael is a Nigerian business journalist and media professional with over 4 years of experience covering companies, financial markets, banking, fintech, economic policy, financial inclusion, and corporate affairs. She currently leads the Companies & Markets desk at BusinessDay, where she drives coverage of Nigeria’s corporate and capital markets, translates complex financial data into accessible stories, and mentors younger journalists. Prior to that, she was the head of the financial inclusion/fintech desk. With a background in banking and finance and extensive experience in media and communications, Michael has developed expertise in financial journalism, economic analysis, investigative reporting and market intelligence. Her work examines how monetary policy, corporate performance, capital flows, technology, and regulatory decisions affect businesses, investors, and households. She was selected from about 3,000 applicants as one of 20 journalists for Cohort 4 of the MTN Media Innovation Programme, gaining exposure to new approaches to journalism, technology, and media innovation. Her international journalism experience and engagement with professionals across Russia, Dubai, Saudi Arabia, and others in different sectors have further broadened her understanding of global communication and development.
