Presentation to Investors & Analysts For the period ended March - - PowerPoint PPT Presentation

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Presentation to Investors & Analysts For the period ended March - - PowerPoint PPT Presentation

Presentation to Investors & Analysts For the period ended March 31 st 2020 1 Disclaimer From time to time, Transnational Corporation of Nigeria Plc (Transcorp) and its subsidiaries (the Group) make written and/or oral forward-


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Presentation to Investors & Analysts

For the period ended March 31st 2020

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Disclaimer

  • From time to time, Transnational Corporation of Nigeria Plc (“Transcorp”) and its subsidiaries (“the Group”) make written and/or oral forward-

looking statements in presentations (including this presentation) and other communication. In addition, representatives of the Group may make forward-looking statements orally to analysts, investors, the media and others. All such statements are intended to be forward looking

  • statements. Forward looking statements include, but are not limited to, statements regarding the Group’s objectives and priorities for 2020,

and beyond and strategies to achieve them, and the Group’s anticipated financial performance. Forward looking statements are typically identified by words such as “will”, “should”, “believe”, “expect”, “anticipate”, “intend”, “estimate”, “may”, “project” and “could”.

  • By their very nature, these statements require the Group to make assumptions and are subject to inherent risks and uncertainties, general and
  • specific. In the light of uncertainties related to the financial, economic and regulatory environments, such risks and uncertainties – many of

which are beyond the Group’s control and the effects of which are difficult to predict – may cause actual results to differ materially from the expectations expressed in the forward-looking statements. Risk factors that could cause such differences include, exchange rate, market exchange, and interest rate, operational, reputational, insurance, strategic, regulatory, legal, environmental, and other risks. All such factors should be considered carefully, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements, when making decisions with respect to the Group and we caution readers not to place undue reliance on the Group’s forward- looking statements.

  • Any forward looking statements contained in this presentation represent the views of management only as at the date hereof and are

presented for the purpose of assisting the Group’s investors and analysts in understanding the Group’s financial position, objectives and priorities and anticipated financial performance as at and for the periods ended on the dates presented, and may not be appropriate for

  • ther purposes. The Group does not undertake to update any forward-looking statements, whether written or oral, that may be made from

time to time by or on its behalf, except as required under applicable securities legislation.

  • The information used in this presentation were obtained from several sources that the Group believes are reliable. Whilst Transcorp has taken

all reasonable care to ensure the accuracy of the information herein, neither Transcorp nor any of its subsidiaries/affiliates makes representation or warranty, express or implied, as to the accuracy and correctness of the information. Thus, users are hereby advised to exercise caution in attempting to place reliance on these information and carry out further research or seek the opinion of professional advisers before reaching conclusions regarding their investment decisions.

www.transcorpnigeria.com

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www.transcorpnigeria.com

Presentation Outline

Overview Operating Environment Group Financial Performance Segment Review Outlook CSR & Awards

04 10 15 18 37 41

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Overview

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www.transcorpnigeria.com

About Transcorp

A diversified conglomerate…

Listed Company with approximately 300,000 Shareholders with commanding presence in the Power, Energy & Hospitality sectors. With an Aggressive Growth Agenda With a Purpose of Improving Lives, Transforming Nigeria Deeply rooted values are the 3Es of Execution, Enterprise and

Excellence

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Our Investment Philosophy

Guided by a sound investment philosophy

Long-term Shareholder Returns Socio-economic Impact

Operational Efficiency Return on Investment Corporate Governance Growth Capacity

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www.transcorpnigeria.com

The Group at a Glance

Transcorp is committed to creating value and making socio-economic impact

With eyes set on generating 25% of the total power requirement in Nigeria, Transcorp Power Limited remains a leader in the Nigerian power sector. Through ownership of choice assets and provision of exceptional service, Transcorp Hotels Plc is redefining hospitality standards in the continent while remaining truly African. We are on a mission to ramp up domestic upstream capacity.

…in strategic sectors of the economy

  • c.972MW installed capacity gas fired power plant
  • Current available capacity of approximately 600MW to

increase rapidly

  • Medium term capacity target of 2,500MW
  • Transcorp Hilton Abuja: Nigeria’s foremost hotel and the

leading business hotel in Africa - 670 rooms, 5 hotel

  • Transcorp Hotels Calabar – 132 rooms, 3 hotel
  • Medium Term: Expansion to Lagos
  • Owner/operator of OPL 281 oil block
  • Estimated Oil Reserve – 189.73mn
  • Gas – 377.48Bn Std Cubic Feet
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Our Journey

www.transcorpnigeria.com

Our achievement milestones speak volume

PHASE ONE 2004 - 2011 PHASE THREE 2019 - 2025 PHASE TWO 2012 - 2018

  • 2004:

Incorporation

  • f

Transcorp.

  • 2005:

Acquisition

  • f

Transcorp Hilton Abuja.

  • 2006: Listing on the Nigerian

Stock Exchange.

  • 2010:

Acquisition

  • f

Transcorp Hotels Calabar.

  • 2011:

Heirs Holdings becomes core investor. POWER

  • Deepen
  • ur

power business through acquisition of additional power plants.

  • Emerged preferred bidder for AFAM.
  • Membership into the West African Power

Pool (WAPP).

  • Explore
  • pportunistic

investments in renewable energy and off-grid solutions. HOSPITALITY:

  • Deepen operational efficiency.
  • Sweat existing assets.
  • Completion
  • f

the

  • ver

$100million upgrade of Transcorp Hilton Abuja

  • Issuance of Certificate of Discharge by

the National Council on Privatisation

  • Expand

into new businesses and locations. OIL AND GAS:

  • Commence production of oil and gas in

OPL 281.

  • Acquire new oil & gas assets.
  • 2012:

Transcorp Ughelli Power emerges preferred bidder for Ughelli Power Plc (UPP).

  • 2013: Successful takeover of UPP.
  • 2013:

Execution

  • f

management agreement with Hilton for Transcorp Hilton Ikoyi.

  • 2014:

Execution

  • f

Production Sharing Contract on OPL 281.

  • 2014:

Execution

  • f

Management Agreement for Hilton Port Harcourt.

  • 2014: Issuance of Transcorp Hotels

IPO.

  • 2014:

NSE Awards Transcorp the Most Compliant Firm in Nigeria.

  • 2015: Issuance of Transcorp Hotels

N20bn bond.

  • 2015: Merger of TUPL and UPP as

Transcorp Power Ltd.

  • 2016:

Commencement

  • f

full Upgrade Project for Transcorp Hilton Abuja.

  • 2017: Commission of GT15 a 115MW

Gas Turbine by Transcorp Power.

  • 2017: Decision to divest from Teragro

Fruit juice concentrate plant.

  • 2018: Year-end closure with highest

profits in two Group companies.

  • 2018: Conclusion of additional land

acquisition for Transcorp Hilton Ikoyi.

  • 2018: TPL surpasses BPE-set minimum

performance target for power generation.

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Management Team

…a team of experienced professionals

www.transcorpnigeria.com Chinweugo Nwafor Group Head, Internal Audit Christopher Ezeafulukwe MD/CEO Adebayo Salako Chief Technical Officer Okaima Ohizua ED/ COO

TRANSCORP POWER LIMITED

Mutiu Bakare Group Chief Finance Officer Owen Omogiafo President/GCEO Chike Anikwe Acting Group Company Secretary Oluwasayo Akinwale Group Head, Marketing & Corporate Communications

GROUP LEADERSHIP

Kevin Brett GM, Transcorp Hilton Abuja Chuma Mgbojikwe GM, Transcorp Hotels Calabar Dupe Olusola MD/CEO Helen Iwuchukwu ED/COO

TRANSCORP HOTELS PLC

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Operating Environment

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www.transcorpnigeria.com

Source: IMF World Economic Outlook – April 2020, WHO Situation Report -113

Legend:

Upward GDP Growth Downward GDP Growth

Global Economic Impact of COVID-19

World economy to slowdown in 2020

USA

5.9%

Brazil 5.3% Canada 6.2% India 1.2% Nigeria 3.4% South Africa 5.8% UK 6.5% China 1.9% Russia 5.5% Europe 7.5% Central Asia & Middle East 5.8%

World GDP growth is projected to slowdown by 3% in 2020.

  • Over

5 million people infected with more than 300,000 deaths worldwide as at May 24th , 2020.

  • Nearly 3.5 billion people around the world are now

livingunder “Lockdown”.

  • Over

209 destinations worldwide have adopted COVID-19 related travel restrictions.

  • About 90 destinations have implemented complete or

partial closure of borders to tourists.

  • Global economy is predicted to lose over $2.7 trillion

while global output is projected to shrink by 3% in 2020.

  • IATA

has estimated that the Tourism and Travel industry could lose up to $252 billion in passenger revenues from Airline travels.

  • About 47 million people are projected to lose their

jobs globally.

  • Significant drop in global commodity prices with the
  • il price crashing from a peak of c. $60pb in Jan. 2020

to below $30pb in Q1 2020. Prices for US WTI crude falling below $0pb into the negative territory on April 20th2020.

Global Impact

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www.transcorpnigeria.com

COVID-19 Pandemic and the Nigerian Economy

Domestic Impact

The number of confirmed case rapidly increase beyond the 5,000 cases threshold as the Nigeria Centre for Disease Control (NCDC) ramp up its testing capability. The Nigerian Stock Exchange has lost over ₦2.5 trillion within 7 weeks, due to the increased uncertainty in the market. Demand–pull inflation rises as panic buying dominates. Disruption in global supply chains, distribution channel as well as fall in consumer and business spending. Exchange rate depreciation as the Central Bank of Nigeria (CBN) yielded to market sentiment thereby adjusting its official exchange rate from ₦306/$1 to ₦361/$1. Pressure on government revenue amidst decline in global price for crude oil. Downward review of the national budget. Nigeria’s external reserve declined by 6% year-to-date from $38.60 billion in Q4 2019 to $35 billion as at the end

  • f March 2020.

Pressure on cash flow, reduction in profit with capital depletion for businesses.

Economic Stimulus Measures

Fiscal Monetary

  • Reduction
  • f

the interest rate

  • n

intervention loans from 9% to 5%.

  • Regulatory forbearance to banks to

restructure terms of facilities in affected sectors.

  • Adoption of a unified exchange rate

system for inter-bank and parallel market rates to ease forex pressure.

  • Creation of ₦50bn target credit facility

through NIRSAL Microfinance Bank for affected households and MSMEs.

  • A 1-year extension of a moratorium on

principal repayments for CBN intervention facilities.

  • Revision of the crude oil benchmark

price from USD 57 to USD 30.

  • Establishment of a ₦500bn COVID-19

Crisis Intervention Fund channeled to the upgrade of healthcare facilities at the national and state level.

  • Grant
  • f

3-month repayment moratorium to be given to all Federal Government funded loans issued by the Bank

  • f

Industry, Bank

  • f

Agriculture and the Nigeria Export- Import Bank.

  • Suspension of the proposed increase of

electricity tariffs by the electricity distribution companies (Discos).

Source: Ministry of Finance, PWC, KPMG, AVA Capital Research

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www.transcorpnigeria.com

Group’s Response to the COVID-19 Pandemic

Our responses focus on safety, business continuity and operation efficiency. Hospitality

  • Coronavirus awareness training for all staff.
  • Provision of Sanitizers, temperature checks and
  • ther safety equipment.
  • Display
  • f

preventive measures within

  • ur

hotels’ environment.

  • Engagement with resident guests and other

stakeholders on the preventive measures put in place.

  • Closure of major parts of the hotels except

essential areas that cater for resident guests.

  • Usage of small chiller when necessary to reduce

the energy consumption.

  • Deactivation
  • f

most elevators to reduce maintenance and energy costs.

  • Re-negotiation of major contracts and loan to

save cost.

  • Focus
  • n

additional sources

  • f

revenue generation such as food delivery service, laundry service etc. Power Power sector is exempted from the lockdown.

  • Activation
  • f
  • ur

Contingency Plans which requires some staff to stay at the plant and

  • thers to work from home.
  • Creation of temporary hostel accommodation

within the plant.

  • Engagement with key stakeholders to share our

Contingency Plans.

  • Provision of adequate welfare and safety tools

for staff on the Plant.

  • Interactive online engagement with staff within

and outside the plant. Corporate

  • Staff continue to work from home.
  • Provision
  • f

necessary technological infrastructure to facilitate working from home.

  • Successfully held our AGM online. This is the first
  • f its kind.
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www.transcorpnigeria.com Source: CBN, NBS, Trading Economics, mbpd = million barrels per day, CHD Research

Key Macro Indicators

Performance highlights for the economy

20 40 60 80

  • 10

20 30 40 50 Foreign Reserve (billion $) Brent Crude Price ($ pb) 10 20 30 40 50 60 70 45 50 55 60 65 Manufacturing PMI Non-Manufacturing PMI HEADLINE INFLATION TICKED UPWARDS DESPITE STEADY MONETARY POLICY RATE NON-OIL SECTOR BOLSTER GROWTH IN GDP WHILST OIL OUTPUT DAMPENS EXTERNAL RESERVES DECLINE ON THE BACK OF THE SUSTAINED DIP IN OIL PRICES PURCHASING MANAGERS’ INDEX(PMI) DECLINES AS ECONOMIC ACTIVITIES DECLINE 1.5 1.6 1.7 1.8 1.9 2 2.1 0% 1% 1% 2% 2% 3% 3% Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20F Oil Production (mbpd) Quarterly GDP Growth Rate 13% 13% 14% 14% 14% 14% 10.0% 10.5% 11.0% 11.5% 12.0% 12.5% Inflation Rate Monetary Policy Rate

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Group Financial Performance

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www.transcorpnigeria.com

Income Statement

Q1 2020 Q1 2019 (N’ Million) (N’ Million)

Revenue 15,392 18,306 Gross Profit 7,346 8,142 Operating Profit 4,134 5,153 Profit Before Taxation 137 2,553 Profit After Taxation 81 2,092

Statement of Financial Position

Q1 2020 FY 2019 (N’ Million) (N’ Million)

Total Assets 311,382 313,133 Total Liabilities 203,600 204,394 Shareholders’ Fund 107,782 108,738

Financial Highlights

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www.transcorpnigeria.com

  • Group revenue declined by 15.9% year-on-year, on the back of 20.6% decline in revenue from Transcorp Power;
  • wing to the challenges with gas supply and transmission infrastructure.
  • Although, Transcorp Hotels recorded increased contribution to revenue from 23% in Q1 2019 to 27% in Q1 2020, it

recorded slight dip from ₦4.19bn in Q1 2019 to ₦4.18bn in Q1 2020. This was primarily due to the impact of COVID-19 pandemic towards the end of Q1 2020.

COMMENT

Revenue Breakdown by Subsidiaries

Q1 2020 (N’ Million) Contribution Q1 2019 (N’ Million) Contribution Transcorp Power 11,217 73% 14,120 77% Transcorp Hotels 4,175 27% 4,186 23%

TOTAL

15,392 100% 18,306 100%

Group Revenue Breakdown

Contribution of subsidiaries to Revenue…

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Power

Segment Review

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Source: WEF – World Economic Forum: The Global Competitive Report; Ernst & Young; *RenCap www.transcorpnigeria.com

Power

Segment Review

13% 8% 79% ELECTRICITY GENERATION MIX (MW)

Bulk of electricity generated comes from thermal sources (Gas-fired power plants).

5.7 million

Households

Over

29,685

Industries Over

772,441

Commercial Ventures With operational capacity in the industry standing below

4,000MW, less than 8,400MW projected for 2018 MYTO.

About 45% have access to electricity supply. A population of more than 190 million people.

Rapid increase in the number of electricity consumers has resulted in increased demand for electricity, thus outpacing generation, transmission, and distribution capacity. Consumers of Electricity Hydro 1,936MW Solar 1,080MW Gas/Thermal 11,560MW

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www.transcorpnigeria.com Source: NERC Quarterly Report 2019

Key Challenges in the Power Sector

Liquidity Crunch

Operators across the value chain continue to battle increased pressure

  • n

cashflow and low collection from final consumers.

Inadequate Supply

  • f Gas

Pipeline vandalism and infrastructural deficit continue to account for slow growth in gas supply to Gencos.

Low Load Off-take

Due to contraints

  • n

power transmission, it has been difficult for load to be taken off.

Tariff Shortfall

Tariff collection scheme remains poor thereby leading to increasing receivables for Gencos.

Power

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www.transcorpnigeria.com Source: NERC Quarterly Report 2019

Notable Improvements in the Power Sector

Power

Key Improvements

Repayment Assurance Plan Increased Generation Capacity Positive Attitude of Government Performance Improvement Plan(PIP)

The Nigerian Bulk Electricity Trading Plc (NBET) made payments from the outstanding receivables to Gencos and gas suppliers in accordance with the Payment Assurance Plan. Average available generation capacity rose by 10.55% to 6,709MW as at Q3 ‘19. This was largely attributed to the increase in the number of available generation units after the completion of maintenance and repair of some plant units. Amid the COVID-19 pandemic, the Federal Government is taking steps towards addressing the challenges of the power sector. One

  • f such steps is the setting up of the Power Sector Reform Working

Group headed by the Vice President. The PIP is to address the inefficiencies in the Discos. The process is to address the technical and operational challenges impacting the

  • perational efficiencies of the Discos.
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www.transcorpnigeria.com

Our Strategy towards Power Sector Issues WAY FORWARD

  • We have recorded significant improvement in the level of gas

supply towards the end of Q1 2020. This is attributable to the repair and commissioning of an NGC gas pipeline that supply gas to our Plant, which was vandalized in Q4 2019.

  • The return to service of the fixed pipeline led to an increase in

gas supply to our plant, as the two sources of gas supply to

  • ur plant have remained operational since then.
  • We now have an activated Gas Supply and Aggregation

Agreement (GSAA) with our gas suppliers. This has ended the best-endeavour arrangement which we had prior to the activation. Our gas suppliers now have a contractual

  • bligation to us to the tune of 124mmscf per day.

This will continue to result in increased generation.

  • We are

equally exploring additional affordable gas supply

  • pportunities.
  • Our long-term strategy is to produce the gas requirement

from our OPL 281 assets for dedicated supply to our power assets.

GAS SUPPLY

  • Ughelli

East gas plant performance was hampered by inadequate gas supply. A rig movement that occurred on January 25th, 2020, resulted in the shut-in of one of the gas wells that supply TPL. This affected gas supply to TPL lasting for a greater part of Q1 2020.

  • In a separate development, The Trans-Forcados Pipeline (TFP)/

SEPLAT condensate issues hit the gas system with significantly low gas volumes to be sought for by the generation companies, and this spanned from March 26th till March 28th 2020.

  • These issues have been resolved, resulting in improvement in

gas supply along the Escravos – Lagos Pipeline System (ELPS).

  • The significant drop in oil prices due to low demand, being

part of COVID-19 impact is expected to shift attention to more gas production for local consumption. We are already taking part in our gas suppliers’ strategic planning in this direction.

Power

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www.transcorpnigeria.com

Our Strategy towards Power Sector Issues WAY FORWARD

  • We will continue to monitor and follow-up on on-

going power infrastructure rehabilitation projects across the country, and plan accordingly.

  • We will also continue exploring opportunities created

by the eligible customer regime, under which we are allowed to sell power directly to certain end users who meet the criteria set out in the governing

  • regulation. By so doing, we can put to good use, our

stranded capacities.

  • We will continue to lead advocacy on the need to

sustainably address the challenges

  • f

the power sector including fixing the infrastructure challenges. TRANSMISSION

  • In Q1 2020, TPL received and complied with a number
  • f

instructions from the National Control Centre, Osogbo, which effectively constrained the

  • ptimization
  • f
  • ur

available capacity due to transmission/ distribution constraints.

  • Other

transmission infrastructure challenges also limited TPL’s ability to optimize its available capacity through generation and evacuation unto the national grid.

  • Only 1 grid collapse was recorded in Q1 2020.

Power

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www.transcorpnigeria.com

COMMERCIAL MATTERS OUTSTANDING RECEIVABLES DUE FROM NBET

  • Following the approval of Federal Executive Council(FEC) for the extension of the Payment Assurance

Plan (PAP), we recently witnessed improved payment of outstanding debts owed Gencos by the Nigerian Bulk Electricity Trading Plc(NBET).

  • There is an assurance that NBET will continue to make payments for outstanding receivables from the

Payment Assurance Plan (PAP).

  • With regards to our pre-2017 outstanding receivables, we are currently pursuing measures to fast track

payment, through engagement with the FG and relevant agencies.

Our Strategy towards Power Sector Issues

Power

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www.transcorpnigeria.com

Income Statement

Q1 2020 Q1 2019 (₦ Million) (₦ Million)

Revenue 11,217 14,120 Gross Profit 4,341 5,040 Operating Profit 3,795 4,570 Profit Before Taxation 1,478 2,867

Statement of Financial Position

Q1 2020 FY 2019 (₦ Million) (₦ Million)

Total Assets 163,130 161,821 Total Liabilities 129,081 129,250 Total Equity 34,049 32,571

  • Revenue dropped by 21% year-on-

year from ₦14.1billion in Q1 2019 to ₦11.2billion in Q1 2020 due to the challenges associated with gas supply and transmission infrastructure in the power sector.

  • Operating expenses declined by 8%

year-on-year from ₦748million recorded Q1 2019 to ₦691million in Q1 2020. This improvement in cost efficiency was driven by the cost

  • ptimization strategy of the group.
  • Transcorp

Power grew shareholders fund by 5% year-to-date to ₦34billion and total assets by 1% year-to-date to ₦163billion as at Q1 2020 despite the challenges caused by the COVID-19 pandemic.

COMMENT

Financial Highlights

Power

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www.transcorpnigeria.com

Key performance metrics 587 563 560 466 462 304 333 349 283 256 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20

Available vs Generated Capacity (MW)

Available Capacity (MW) Generated Capacity (MW) 0.0 0.5 1.0 1.5 0% 20% 40% 60% 80% Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20

Capacity Utilization vs Gas Consumed

Capacity utilization Gas Consumed (Rebased)

Declining capacity utilization due to gas Supply challenges.

Power

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Hospitality

Segment Review

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Europe

US$2.0bn 9.1%

Source: WTTC, NBS

Hospitality

Key Industry Indicators…

Latin America

US$299bn 8.8%

North America

US$2.1tn 8.8% Total GDP Contribution Global GDP growth Travel & Tourism GDP growth

Africa

US$168bn 7.1%

Middle East

US$245bn 8.6%

North Asia

US$2.1tn 9.8%

South Asia

US$234bn 6.6%

Oceania

US$197bn 11.7% 1.6% 2.3% 2.2% 1.2% 2.4% 6.4% 4.6% 5.3%

₦638 billion (0.89%)

Contribution of Hospitality Sector to Real GDP in 2019.

2.85%

Real annual growth recorded by the Hospitality Sector to 2019, surpassing the 2018 figure by 1.09%.

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Source: *World Travels & Tourism Council

www.transcorpnigeria.com

Impact of COVID-19 on the Hospitality Segment

Estimated

US$2.1 Trillion

Projected loss in global GDP Up to

75 Million Jobs

at risk

2.1% Increase

in Global unemployment rate directly linked to Travel & Tourism job losses

Sharp drop in Occupancy Rate

The COVID-19 pandemic has drastically reduced the number of guests that patronized Hotels, Resorts, parks, and leisure homes in the country.

Cash flow constraints

Restriction of mobility and virtual business

  • perations have adversely impacted on
  • ur business revenue.

Hospitality

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www.transcorpnigeria.com

Strategic Initiatives to alleviate COVID Impact

01

The hotels have launched food and beverage services as well as takeaway

  • fferings. It also kicked off pick-up and

delivery laundry services to serve guest during the lockdown. The development of innovative events such as drive-in cinema’s and concerts that adhere to social distancing guidelines while keeping

  • ur

hotel top

  • f

mind and generating revenue. Putting in place and communicating top- notch safety guidelines to build confidence amongst our guests.

02 03

Although the Nigerian economy is gradually reopening in phases to give room for improvement in economic activities, the hospitality service ventures amongst

  • ther non-essential sectors

remain closed. The pressure for revenue generation is paramount and we have embarked

  • n the following strategies:

Hospitality

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www.transcorpnigeria.com

Key Performance metrics

66% 70% 65% 54% 69% 38% 71% 70% 64% 51% 74% 35% 0% 20% 40% 60% 80% Oct '19 Nov '19 Dec '19 Jan '20 Feb '20 Mar '20

Occupancy Rate

Industry THP 82,790 82,960 77,120 76,275 83,404 83,604 64,947 62,548 59,904 60,244 67,873 64,629 Oct '19 Nov '19 Dec '19 Jan '20 Feb '20 Mar '20

Average Daily Rate (₦)

THP Industry 58,338 58,026 49,561 38,703 61,563 29,553 42,733 43,492 39,088 32,338 46,519 24,695 Oct '19 Nov '19 Dec '19 Jan '20 Feb '20 Mar '20

Revenue Per Available Room (₦)

THP Industry

Hospitality

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www.transcorpnigeria.com

Financial Highlights

Income Statement

Q1 2020 Q1 2019 (₦ Million) (₦ Million)

Revenue 4,175 4,187 Gross Profit 3,005 3,102 Operating Profit 661 1,110 (Loss)/Profit Before Taxation (687) 436

Statement of Financial Position

Q1 2020 FY 2019 (₦ Million) (₦ Million)

Total Assets 114,809 114,746 Total Liabilities 57,952 57,203 Total Equity 56,856 57,543

  • Revenue dropped slightly by 0.3% year-
  • n-year from ₦4.19billion in Q1 2019 to

₦4.18billion in Q1 2020.

  • Consequently, our hospitality segment

recorded a loss to the tune

  • f

₦687million in Q1 2020 down from ₦436million profit recorded in Q1 2019. The reason for the loss is the Interest expenses that is now being expensed as results of completion of the upgrade as against Q1 2019 where the upgrade were still ongoing and capitalisation of interest were still on. The impact of the COVID-19 will be seen in Q2 2020 on both the revenues and PBT.

COMMENT

Hospitality

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Oil & Gas

Segment Review

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www.transcorpnigeria.com

Oil and Gas

Major Energy indicators

Source: OPEC, NBS, International Energy Agency, PWC Nigeria 1Million Barrels Per Day, *Million Barrel

$26.5

Average brent crude oil price for the month of April 2020.

>N15Tn

Sectoral value in terms of real GDP

8.78%

Industry contribution to Nigeria, Q4 2019 GDP m

36,972 MB*

Proven crude oil reserve in Nigeria

63

Marginal undeveloped fields are available for bid after the election

XXX

XXX Average production for the year Q4 2019.

2 MBPD1 N233Bn

Estimated total lost income from gas flaring. Cubic feet of natural gas.

1.7Tn

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The occasional agitations by indigenes in the Niger Delta has remained a challenge for the oil and gas industry. Global

  • il

price fluctuations has depleted Nigeria’s external reserve as well as dampen investors interest in the upstream subsector. The continued uncertainty surrounding the Petroleum Industry Bill (PIB) has slowed the exploration and production of oil in Nigeria. Inadequate infrastructure in the form

  • f

transportation and distribution network for natural gas remains a challenge to the development

  • f

the domestic oil & gas value chain.

Delay in PIB Infrastructural Deficit Price fluctuations and PMS price regulation Insurgency/pipeline vandalism

www.transcorpnigeria.com

Challenges hindering the sector in Nigeria…

Oil and Gas

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Estimated Oil Reserve and Gas are 189.73mn Million Stock Tank Barrels (MMSTB)and 377.48 Billion Standard Cubic Feet (BSCF) respectively.

Partnerships

 Identification

  • f

competent and capable technical/financial partners to jointly develop asset  Commence funding considerations and financing options for OPL 281 Work Programme obligations

2018 - 2020

Drilling Expansion

 Site Survey and Location Preparation  Community Engagement and conclude FTOs with Host Communities  Drilling of Obote-2X Well.  Increase production

  • f

the hydrocarbons (oil & gas) depending

  • n drilling results;

 Expand gas productions  Conversion of OPL to OML

2020 - 2021 2021 - 2022

Production

 Acquire 3D Seismic Data  Drilling of second well  Complete all Work Programme obligations

2021 - 2022

www.transcorpnigeria.com

Strategic Plan…

Oil and Gas

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Outlook

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Hospitality Power Business

ADR (₦) 80,094 78,931 Occupancy(%) 53 11 Rev Par (₦) 43,273 9,033 Average (MW) Available Capacity 462 538 Average (MW) Generated Capacity 256 407 Q1 2020 Actual Q2 2020 Target

www.transcorpnigeria.com

Q2 2020 Outlook

Guidance for future performance…

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Strategic fit Gas Availability Sufficient Evacuation Capacity Cost-efficient Capacity Recovery Eligible Customer Opportunity

01 02 03 04 05

www.transcorpnigeria.com

Afam Acquisition

Progress made so far…

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Secure Formal Approval from NCP

Issue of 15% Bank Guarantee Negotiation of Transaction Agreements Execute Transaction Agreements Payment of 25% Acquisition Cost Payment of Balance 75% Acquisition Cost Takeover

Q4 2019 Q4 2019 Q4 2019 Q1 2020 Q1 2020 Q2 2020 Q3 2020 We will explore the possibility of early takeover.

Secure Funding

Indicative Timeline

www.transcorpnigeria.com

Afam Acquisition

Outlook…

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CSR & Awards

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www.transcorpnigeria.com

CSR Activities

CSR Initiatives undertaken so far…

COVID-19 Relief Support: Transcorp Power donated some relief materials (Food items, Hand sanitizers, Liquid soaps & cash donations) to its host communities- Ekrerhavwe Community, Ekakpamre Community, Eruemukohwarien Community as well as Ughelli South and North Local Governments of Delta State to cushion the effect of coronavirus pandemic. A total of 1,308 families benefitted from this intervention

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www.transcorpnigeria.com

CSR Activities

CSR Initiatives undertaken so far…

Walk/Run Against Cancer: Transcorp Hilton Abuja celebrated World Cancer day in partnership with Project PinkBlue with their annual walk/run and free cancer screenings. Newspaper, single-use plastics and other recyclables: Transcorp Hilton Abuja sustained its partnership with Chaja Datti to recycle newspapers and other recyclables at the Hotel. So far, over 26,321kilogram (kg) of waste has been recycled School Children Empowerment:

  • Transcorp Hotels Calabar donated trophies to support the annual

inter-house sports of Presbyterian Primary school Big Qua, Calabar.

  • Transcorp Hilton Abuja team members in partnership with an NGO

built new blocks

  • f

classrooms a for the children

  • f

Shape Community School, Abuja. Women Empowerment: Transcorp Hilton Abuja sustained its Business Empowerment Program which empowers women with skills in sewing and training

  • pportunities

that ensure they are financially and economically included. In 2019, the 5th batch

  • f

ladies in this programme graduated, bringing the total number of beneficiaries to 15 since inception.

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www.transcorpnigeria.com

Awards and Milestones

2019 World Travel Awards

  • Africa’s Leading Business Hotel
  • Nigeria's Leading Hotel
  • Nigeria's Leading Hotel Suite
  • Nigeria's Leading Business Hotel
  • Nigeria's Leading Meetings, Incentives

Conferences, and Exhibitions (MICE) Hotel

2019 Trip Advisor Awards

  • Travelers Choice Award
  • Certificate of Excellence(Hotel)
  • Certificate of Excellence (Bukka

Restaurant)

2019 Seven Stars Luxury Hospitality & Lifestyle Awards

  • 2019 prestigious Signum Virtutis (Seal of

Excellence) award

  • Seven Star Business Hotel (Africa

Special) for 2019

2019 National Productivity Award

Productivity and Innovation Award

Abuja Business & Excellence Awards

Most Outstanding Business Brand of the Year 2019

2019 FIABCI Awards

Prix'D Excellence Award to Transcorp Hilton for Best Hotel (Design, Content) 2019

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www.transcorpnigeria.com

Awards and Milestones

Post-Privatisation Discharge

Transcorp Hotels Plc was discharged from further post-privatisation monitoring by the National Council on Privatisation

Corporate Governance Awards

Transcorp Hotels maintained its Corporate Governance Rating System (CGRS) status with the Nigerian Stock Exchange in 2019

2019 Hilton Travel with Grant

Social intervention program – Business Empowerment Program for Women (BEPW)

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Questions

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Contact:

Mutiu Bakare mutiu.bakare@transcorpnigeria.com Florence Nasamu florence.nasamu@transcorpnigeria.com Oluwatobiloba Ojediran

  • luwatobiloba.ojediran@transcorphotelsplc.com
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Thank You