Geregu Power’s half-year profit up 148% on back of increased energy sales

Geregu Power turned in 148.5 per cent more in net profit for the first half of the year compared to the same period of last year.

The company’s position was impacted by increased income from energy sales and, to some extent, capacity charge – the company’s major revenue sources.

The feat could mean the synergy struck by the firm with Siemens earlier in the year towards capacity expansion is beginning to pay off.

The electricity provider, backed by Femi Otedola, who chairs the board of Nigeria’s oldest lender FBN Holdings, announced an agreement with the German multinational technology conglomerate in May to more than double its current nameplate capacity to 1,200 megawatts.

That entails scaling up Gereru I, one of its top power plants, to 500mw from 435mw and building a 500mw-new power plant using lower emissions turbines.

“The establishment of a combined cycle operations to generate an additional 200mw,” is also being planned, Geregu Power said in a May statement.

Revenue for the period under review climbed to N80.7 billion, up by 32.5 per cent, according to its unaudited earnings report issued Friday.

One notable downside of the generally strong performance was impairment loss on financial assets, which accelerated more than threefold to N6 billion after long-due receivables from trade debtors surged by 220.3 per cent.

Profit before income tax rose to N30.2 billion from N12.3 billion a year earlier.

The stock has returned 150 per cent since the start of the year, outperforming the Nigerian Exchange’s main stock index, which has yielded 33 per cent.

It has also outpaced NGX 30, the index that tracks the thirty most capitalised and most liquid equities on the bourse, which has improved by more than 27 per cent.

The share price of Geregu Power has not moved since 4 March, stuck at N1000 per unit.