Geregu Power Share Price Soars on Pre-Tax Profits Surge to $22M
TLDR
- Geregu Power Plc records a significant 107% increase in pre-tax profits, reaching N36.2 billion ($22.2 million) for the first nine months of 2024.
- The company's revenue saw a remarkable 102% year-on-year increase, totaling N112.5 billion, fueled by N71.4 billion from energy sales and N41.1 billion from capacity charges.
- Despite economic challenges, Geregu Power maintains strong gross margins exceeding 41%, showcasing steady financial performance and market confidence.
Geregu Power Plc, Nigeria’s first publicly listed power generation company, reported a 107% increase in pre-tax profits for the first nine months of 2024, reaching N36.2 billion ($22.2 million), compared to N17.4 billion in the same period of 2023. Profit after tax came in at N24.1 billion.
Annualized, Geregu Power's profits suggest a compounded annual growth rate (CAGR) of 23% over the last five years. Revenue for the period was N112.5 billion, a 102% year-on-year increase. The company generated N71.4 billion from energy sales and N41.1 billion from capacity charges.
Despite inflation and rising costs, gross margins remained strong at over 41%. Geregu Power’s share price has surged 188% year-to-date, reflecting investor confidence in the company’s growth potential.
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Key Takeaways
Geregu Power's 2024 performance underscores significant growth potential, with a projected full-year pre-tax profit of N53 billion, a 118% increase from 2023. Despite operating at 50% capacity, the company’s profits have doubled, driven by higher electricity tariffs and industry reforms aimed at improving Nigeria’s power sector. While Geregu Power’s price-to-earnings (P/E) ratio of 102x suggests the stock is highly valued, investors remain optimistic about future growth, partly due to the company’s consistent dividend payouts and potential capacity expansion. Government initiatives, such as reforms of the Transmission Company of Nigeria and private sector involvement, have created a more favorable environment for power generation companies, further supporting Geregu Power's growth trajectory.
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