Transcorp power profit projected to hit N114bn on capacity expansion

Transcorp Power Plc is expected to see its profit rise to about N114 billion in 2026, driven by higher generation capacity and stronger energy output, according to analysts at Lagos-based consultancy Meristem.

The firm’s profit after tax is projected to reach N113.8 billion in the 2026 financial year, up from N91.4 billion in 2025. The outlook is supported by plans to boost available capacity to 750 megawatts, compared with the current 550 megawatts.

Transcorp Power delivered a robust performance in 2025, with revenue climbing 30 percent year-on-year to N398.3 billion. The increase followed the rehabilitation of a key gas turbine unit, which lifted generation capacity from 417 megawatts to 550 megawatts. Energy-delivered revenue surged nearly 43 percent to N293.9 billion, while capacity-charge revenue posted modest growth.

Analysts expect the planned capacity ramp-up to further lift energy sales in 2026, projecting revenue growth of about 26 percent to N503.1 billion. A strategic gas supply partnership between parent company Transnational Corporation and Heirs Energy is also seen as strengthening fuel reliability, a critical factor for thermal generation.

Despite the positive outlook, profitability remains under pressure from rising input costs. Gas prices jumped to an average of $3.52 per MMBtu in 2025, up from $2.26 the previous year, contributing to a 32 percent increase in cost of sales. Operating expenses more than doubled due to new intragroup service charges and impairment losses, compressing the operating margin to 31 percent. Finance costs also trended higher amid elevated interest rates, though total debt declined 18 percent to N30.7 billion.

Liquidity challenges persist, with trade receivables rising 57 percent to N468.4 billion in 2025 and settlement delays stretching receivables days beyond 350. However, analysts note that a proposed bond-backed settlement of generation companies’ receivables could materially improve cash flows across the sector.

With capacity expansion underway and gas supply arrangements expected to underpin output, Transcorp Power’s earnings trajectory in 2026 will hinge on how effectively higher volumes offset structural cost and liquidity constraints in Nigeria’s electricity market.

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