The Chairman, Transcop Hotels Plc, Mr. O’tega Emerhor, on Wednesday said a combination of factors such as insecurity in parts of the country as well as the outbreak of the deadly Ebola Virus Disease in 2014 affected the operations of the company.
He described the 2014 operating year as challenging for the hotel and tourism sector of the economy due to the prevailing security challenge as a result of the activities of insurgents.
Emerhor, while speaking at the Annual General Meeting of the company in Abuja, said that gross revenue dropped to N14.5bn in 2014 compared to N14.8bn in the previous year
He also said the profit after tax dropped by N1.1bn or 25 per cent from N4.4bn in 2013 to N3.3bn in 2014.
According to him, the operating profit also decreased by 24 per cent to N4.4bn from N5.8bn in 2013 due to increase in administrative costs as well as incremental cost of hosting the World Economic Forum in Africa.
“Gross revenue for the company remained largely flat at N14.5bn as against N14.8bn on the back of increased security challenges in the Federal Capital Territory and the effects of the Ebola Virus Disease,” Emerhor said.
Despite the challenges, shareholders of the hotel approved the sum of N2.8bn as dividend for the 2014 financial year. This translates to 37 kobo for every 50 kobo ordinary share.
The shareholders commended the board and management for declaring a dividend amid the hostile business environment.
The chairman said the company’s total assets grew to N69.5bn in 2014 compared to N66.4bn in the previous year.
“Notwithstanding the challenges we faced in 2014, we are excited and optimistic about the long term outlook of the hospitality industry in Nigeria and the position of Transcorp Hotels in this industry,” Emerhor added.
He said the company would over the next five years engage in phased approach in developing high-end hotels in Ikoyi and Ikeja in Lagos; Port-Harcourt, Rivers State; and Warri, Delta State, as well as a convention centre and apartment complex in Abuja.
He said the company would also leverage on the Transcorp Hilton brand and strong customer base to provide excellent services as well as achieve superior returns from the new assets.
Emerhor said the Transcorp Hilton Abuja would be upgraded this year to completely transform the existing facilities and amenities, and position it as a clear leader in Nigeria’s hospitality industry.
The Managing Director/Chief Executive of the company, Mr. Valentine Ozigbo, said despite the bearish state of the stock market, it was able to raise N4.18bn, representing 52 per cent of the N8bn offer amount, from its recent Initial Public Offer.
He said the company would also require additional funding in the short and medium terms to enable it execute its expansion drive.
“To this end, we will be implementing a robust funding strategy, which includes the use of debt (bank and bonds), equity (third party participation) and quasi-equity over the next one to three years,” Ozigbo said.
He added that N316m was donated by the company to the Internally Displaced Persons Fund as part of a private sector-led initiative to support relief measures for the victims of insurgent attacks in the northern part of the country.