Impressive Return on Investment Is Delivered By Geregu Power

Top-performing stocks offer financial gains and the chance to participate in the company’s profits to investors. And Geregu Power Plc has accomplished both, paving the way for the business to once again generate profit for shareholders in 2023.

From the start of the year till now, the power firm has produced a capital investment return of 95%.

What does the market have coming up? Fund for Export Development in Africa (FEDA), a strategic investor, has joined the board of Geregu Power as part of its investment to increase capacity.

Management informed the Nigerian Exchange that FEDA now owns 5% of the shares of Femi Otedola’s company, Geregu Power Plc, as a result of this acquisition.

The market continues to identify value and potential for growth in the power company’s core business areas, according to market data that was screened, which led to a significant increase in the fair valuation of the company.

The market valued the company at N290.70 on Friday after adverse trading activity on major tickers because the company gave shareholders a dividend of N8 per share in April.

One of the best-performing equities on the local exchange, the electricity company has increased in value by more than three times since listing 25 billion shares at N100 in October.

However, despite a challenging operating climate, the company’s 2022 financial statement revealed a decline in earnings. The power firm launches the project in the first quarter of 2023.

The revenue of the power generating company decreased. Due to the company’s borrowing costs of N3.1 billion, profit decreased 36.3% to N3.54 billion from N5.5 billion.

Strong capital investment, however, helped feed optimistic perceptions of future earnings growth. Geregu revealed that one of the power-generating enterprises will be purchased using N40.085 billion in unsecured corporate bonds with a 7-year tenor that were issued in July 2022.

Some value seekers in the local exchange may find the power-generating business’s first dividend payment announcement since it became a public company appealing.

Geregu Power Plc’s stock fell 10% last week.

Geregu Power Plc.’s worth has climbed to N727 billion over 25 billion shares outstanding at a market price of N290.70 kobo, seven months after it became a listed firm. When it was listed in October 2022, it had a valuation of N250 billion.

The power firm hit N812.50 billion before it started to decline at a price of N325 on the stock market.

The company’s share price has increased by three times its initial listing price on the stock exchange. Some experts attribute the development to value seekers’ aggressive positioning in advance of dividend distributions.

The Geregu Power Plc share has kept rising in value on the Nigerian stock exchange since its board of directors announced that dividends would only be paid if the permission of shareholders was acquired at its annual general meeting.

According to information obtained by Daily Global News, the company listed on the Nigerian Exchange in October 2022 for N100 per share. Despite its dismal earnings, there was a rise.

The board of directors recommends a N8 dividend per ordinary share for shareholders with February 27 as the qualification date, according to the company’s audited statement, despite the fact that the company saw a significant year-over-year fall in the top and bottom lines due to interruption in its business line.

The company’s profit decreased by more than 50% to N10.171 billion from N20.550 billion in its 2022 financial statement reported to the Nigerian Exchange. This came after a perceived fall in activity level.

At the end of 2022, Geregu’s income plummeted to N47.619 billion, a decrease of 32.89% from N70.956 billion in the same year in 2021. Energy sales decreased year over year to N30.252 billion, down 33.80% from N45.696 billion in the prior year, according to the company’s financial report.

Similar to this, capacity fee revenue plummeted from N25.260 billion to N17.367 billion.

Geregu attributed the decrease in topline to the Trans-Forcados pipeline’s nationwide force majeure declaration by Shell Petroleum Development Company Limited and its subsequent repercussions on the Forcados oil terminal, where gas supplies from the plant’s main gas supplier ended as of July 17, 2022.

However, according to the audited report, the pipeline maintenance was finished at the end of November 2022, and normal operations and the supply of gas have since resumed.

Remember that Amperion Power Distribution Company Limited became the sole owner of Geregu Power Plc when the FGN sold its remaining 20% stake to it in 2021.

As a result of this change, FGN is no longer a shareholder in Geregu Power Plc. According to the audited report, the Company was listed on the main board of the Nigerian Exchange Group on October 5, 2022.

Olufemi Otedola CON and Christopher Adeyemi, two directors who were slated to retire by rotation, were re-elected by the shareholders during the meeting.