Mounting unpaid bills overshadow Transcorp Power’s strong profit

Transcorp Power PLC, a leading player in Nigeria’s power generation sector, delivered a robust operational performance for the nine months ended September 30, 2025, but the results are overshadowed by a mounting challenge in collecting customer payments, a systemic issue plaguing the industry.

The unaudited interim financial statements released Monday reveal that the company’s net profit jumped by 17.12%, rising to ₦68.42 billion from ₦58.42 billion in the corresponding period of 2024.

The impressive profitability was driven by a substantial increase in business activity, with total revenue from contracts with customers surging by 38% to ₦308.54 billion from ₦223.56 billion a year prior.

Earnings per share (EPS) also saw a significant boost, climbing from ₦7.79 to ₦9.12, confirming the strong growth in value for shareholders. A major contributor to the revenue growth was the international customer segment, which nearly doubled its contribution year-over-year, alongside strong energy delivered and capacity charge revenues.

Liquidity risk mounts

Despite the celebratory profit figures, the company’s balance sheet highlights a critical financial risk: soaring uncollected debts. The company’s Trade and Other Receivables—largely debts owed by the electricity off-takers—have ballooned to an alarming ₦432.15 billion as of September 30.

This figure represents a massive 45% increase from the ₦298.39 billion recorded at the end of the last financial year (December 31, 2024). The failure to convert sales into cash is draining the company’s working capital, with the cash flow statement showing a staggering negative adjustment of ₦133.76 billion due to the increase in these uncollected receivables. This single factor is the largest draw on cash from operations.

Operational costs also rose sharply, with the total Cost of Sales increasing by over 48% to ₦188.87 billion, mainly driven by higher natural gas and fuel expenses. However, the company’s efficient cost management, particularly on the administrative front, helped maintain a healthy Operating Profit of ₦94.05 billion.

Debt profile

The company’s total borrowings stood at ₦34.6 billion, down slightly from ₦37.6 billion, mainly loans from UBA Plc, with interest rates between 24.5% and 30.5% per annum.
Deferred tax liabilities dropped from ₦7.3 billion to ₦4.9 billion, improving the company’s long-term outlook.