Presentation to Investors & Analysts First Quarter 2019 1 - PowerPoint PPT Presentation

Presentation to Investors & Analysts First Quarter 2019 1

Disclaimer From time to time, Transnational Corporation of Nigeria Plc (“Transcorp”) and its subsidiaries (“the Group”) make written and/or oral forward- • looking statements, including in this presentation and in other communications. 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 2019, 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 ” 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. Especially in light of the uncertainty 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 of 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 other 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 is obtained from several sources the Group believes are reliable. Whilst Transcorp has taken all reasonable care to ensure the accuracy of the information herein, neither Transcorp nor 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 rely on these information and carry out further research before reaching conclusions regarding their investment decisions. www.transcorpnigeria.com 2

OVERVIEW OPERATING GROUP FINANCIAL OUTLOOK QUESTIONS SEGMENT REVIEW ENVIRONMENT OVERVIEW 12 16 4 37 9 40

OVERVIEW

Our Proposition STRATEGIC BUSINESSES With sight set on Powering Nigeria Today, Tomorrow and in the Future, TPL remains a leader in Nigerian OUR ADVANTAGE Power Sector Sound Corporate Governance Long-term Shareholder Returns Strong Service Delivery Growth Capacity Through ownership of choice assets and Provision Socio-economic of extra-ordinary service, THP is redefining Capital Appreciation hospitality standards in the continent while Impact remaining truly and authentically African. OPL281 We are on a mission to ramp up domestic upstream capacity www.transcorpnigeria.com 5

About Transcorp Diversified conglomerate Listed With an Aggressive Company with approximately Growth Agenda 290,000 Shareholders with commanding presence in the Power, Energy & Hospitality sectors. With a Deeply rooted values are Purpose the 3Es of of Execution, Improving Enterprise and Lives, Transforming Excellence Nigeria www.transcorpnigeria.com 6

The Group at a Glance … • Nigeria’s foremost hotel and the leading business hotel in Africa- 670 rooms, 5  hotel 83% Ownership • Transcorp Hotels Calabar – 132 room, 3  hotel • c.972MW installed capacity gas fired Transcorp is power plant • Present available capacity of 596MW committed to 50% Ownership to increase rapidly creating value and • Medium term capacity target of making socio- 2500MW economic impact • Owner/operator of OPL 281 oil block • Estimated Oil Reserve – 189.73mn OPL281 • Gas – 377.48Bn Std Cubic Feet 100% Ownership • Exploration commences in 2019/2020 www.transcorpnigeria.com 7

Our Journey Merger of TUPL and UPP as Transcorp Ughelli Power emerges ▪ TPL: ▪ ▪ Transcorp was Transcorp Power Ltd in 2015 To expand customer base preferred bidder for Ughelli Power ▪ incorporated in 2004 Plc (UPP) in 2012. with Africa as part of the ▪ Commenced full Upgrade target. Acquisition of Transcorp ▪ Project for Transcorp Hilton To deepen our play in ▪ Successful takeover of UPP in 2013 ▪ Hilton Abuja in 2005 Abuja in 2016 existing businesses ▪ Transcorp Power To expand Available ▪ Execution of management ▪ Listed on the Nigerian ▪ commissioned GT 15 a agreement with Hilton for Transcorp Capacity to 2500MW Stock Exchange in 2006 115MW Gas Turbine in 2017 Hilton Ikoyi in 2013 THP: Leveraging on technology to ▪ Acquisition of Transcorp Decision to divest from ▪ ▪ Execution of Production Sharing deepen our presence in ▪ Hotels Calabar in 2010 Teragro Fruit juice existing areas. Contract on OPL 281 in 2014 concentrate plant in 2017 ▪ Addition of other service ▪ Heirs Holdings becomes Closed the year 2018 with ▪ Management Agreement for Hilton lines, e.g. spa ▪ core investor in 2011 highest profits in two Group Secure final approval & Port Harcourt executed in 2014 ▪ companies complete construction of Transcorp Hilton Ikoyi ▪ Transcorp Hotels IPO in 2014 Conclusion of additional land ▪ acquisition for Transcorp OPL 281: Awarded the Most Compliant Firm To commence production of ▪ Hilton Ikoyi ▪ oil and gas in Nigeria by the NSE in 2014 Surpassed BPE-set minimum ▪ performance target for ▪ Transcorp Hotels N20bn bond power generation. issuance in 2015 PHASE ONE PHASE TWO PHASE THREE 2004 - 2011 2012 - 2018 2019 - 2024 1 2 3 8 www.transcorpnigeria.com

OPERATING ENVIRONMENT

Key Indicators Nigeria has regained its position as the largest economy in Africa Large and growing market & workforce GDP (2018 US$ billions) 201m* Population Nigeria 355 201 million 3780 MW Largest country in the world by 7th population 53% Average electricity population South Africa 349 Working Population generated (15-64 years) Angola 102 53% Working population $1859.7 $355 billion Low GDP Kenya 79 2018 GDP Per Capita Income Investment gateway to West Africa _ _ _ _ _ __ Ethiopia 76 N278 billion 16.9% Ghana 59 2018 Total Revenue Unemployment rate c.60% from International Of the West African market 1.8mn bpd travelers Cameroon 35 Average Oil No.1 production in 2018 GDP in Africa Source: Oxford Economics 85% (2018) Mobile 50% Of ECOWAS manufacturing penetration rate capacity Nigeria concluded its election in Q1 2019 Source: 1 NBS/UN; 2 OPEC; 3 BudgIT; 4 NPC; 5 World Bank; 6 BMI; Ernst & Young www.transcorpnigeria.com 10

Key Macroeconomic Indicators Inflation rate has been decreasing; 11.25% by the end of Q1 2019 Implication • Further devaluation of the naira will increase the burden of debt servicing for companies. • Decline in inflation rate may cause interest rates to drop which in turn reduces the cost of capital within the local market. • Increase in foreign reserves and favorable balance of payment position will strengthen the Naira and boost investor confidence in Nigeria www.transcorpnigeria.com 11

GROUP FINANCIAL REVIEW