Geregu Power Plc has reported remarkable revenue growth of 65%, reaching ₦137.13 billion for the full year 2024, up from ₦82.91 billion in 2023. The company’s strong financial performance was driven by increased operational capacity, cost efficiencies, and improved profitability.
Additionally, Profit After Tax (PAT) surged by 71% to ₦27.43 billion, pushing Earnings Per Share (EPS) to ₦10.97, a significant increase from ₦6.42 in 2023. Despite rising cost pressures, Geregu Power maintained strong profitabilitythrough strategic cost management and capital reinvestment.
Key Financial Highlights (2024 vs. 2023)
- Revenue: ₦137.13 billion (2023: ₦82.91 billion) ↑65%
- Gross Profit: ₦62.73 billion (2023: ₦42.66 billion) ↑47%
- Operating Profit: ₦42.95 billion (2023: ₦31.14 billion) ↑38%
- Net Finance Cost: ₦1.69 billion (2023: ₦6.75 billion) ↓75%
- Profit Before Tax (PBT): ₦41.27 billion (2023: ₦24.39 billion) ↑69%
- Profit After Tax (PAT): ₦27.43 billion (2023: ₦16.05 billion) ↑71%
- Basic and Diluted EPS: ₦10.97 (2023: ₦6.42) ↑71%
The significant rise in revenue and profitability underscores Geregu Power’s operational efficiency, improved power generation output, and disciplined financial management.
Revenue Growth: Key Drivers
Geregu Power’s 65% YoY revenue increase was supported by:
1. Expanded Power Generation & Higher Capacity Utilization
- The company increased its electricity generation capacity, leading to higher sales and stronger revenue generation.
- Improved efficiency in power plant operations resulted in optimized energy production.
2. Favorable Tariff Adjustments & Market Demand
- Tariff adjustments aligned with inflationary trends and higher energy demand, boosting revenue per unit sold.
- Geregu Power capitalized on increased electricity demand from industrial and commercial clients.
3. Strategic Operational Efficiency Enhancements
- Improved plant reliability and cost efficiencies contributed to higher revenue growth.
- The company invested in advanced operational technology, reducing downtime and maximizing output.
Despite cost inflation in fuel and operational expenses, Geregu Power managed to sustain strong revenue growth and margin expansion.
Earnings Per Share (EPS) Growth: Key Factors
Geregu Power’s EPS surged 71% to ₦10.97, reflecting enhanced profitability and cost efficiencies.
1. Higher Profitability Margins (+71% PAT Growth)
- Profit After Tax (PAT) rose to ₦27.43 billion, driven by higher revenue and cost optimization strategies.
- Profit Before Tax (PBT) increased 69% to ₦41.27 billion, demonstrating robust earnings growth.
2. Effective Cost Management & Administrative Expense Reduction
- Administrative expenses dropped to ₦9.86 billion, down 24% from ₦13.01 billion in 2023.
- Cost-saving measures, including reduced overhead expenses and streamlined operations, improved margins.
3. Lower Finance Costs Boosted Net Income
- Net finance costs fell 75% to ₦1.69 billion, compared to ₦6.75 billion in 2023, reflecting:
- Lower borrowing costs.
- More efficient debt management.
- Stronger cash flow supporting reduced reliance on external financing.
4. Strong Dividend Payout & Shareholder Returns
- Dividends remained steady at ₦20 billion, reinforcing Geregu’s commitment to rewarding investors.
- Retained earnings climbed to ₦51.34 billion, supporting future expansion and potential dividend increases.
Operational Highlights & Cost Management
Geregu Power’s strategic focus on cost efficiency and capital reinvestment helped sustain profitability growth.
1. Gross Profit Expansion Despite Rising Cost of Sales
- Cost of sales rose 85% to ₦74.40 billion, driven by higher fuel and maintenance costs.
- However, gross profit still increased 47%, reflecting effective pricing strategies and operational efficiency.
2. Reduction in Administrative Expenses (-24%)
- Streamlined operational costs helped improve profitability.
- This decline was attributed to digital transformation, process automation, and enhanced supply chain management.
3. Improved Asset Utilization & Capital Expenditure Focus
- Investment in new plant equipment reached ₦41.28 billion, signaling long-term expansion.
- Capital expenditure rose dramatically from ₦933 million in 2023, reflecting growth initiatives.
These cost efficiencies strengthened Geregu Power’s ability to generate sustained earnings and shareholder value.
Balance Sheet Strength & Financial Position
Geregu Power maintained a solid balance sheet, positioning itself for future growth and expansion:
- Total Assets: ₦51.34 billion (up from ₦70.26 billion in 2023) ↓27% (reflecting capital investments).
- Cash & Cash Equivalents: ₦39.94 billion (down from ₦70.26 billion in 2023) ↓43%.
- Total Equity: ₦51.34 billion, supporting long-term investment strategies.
Key Takeaways from Balance Sheet Movements
- Higher capital expenditures reflect expansion and infrastructure investments.
- Declining cash reserves were used for growth initiatives and operational improvements.
- Debt levels remain controlled, minimizing financing risks.
This financial strategy ensures Geregu Power remains competitive in the evolving energy landscape.
Dividend & Shareholder Returns
Geregu Power maintained a strong commitment to dividend payouts, offering ₦20 billion in dividends, similar to 2023.
- Consistent dividend payouts align with sustained profitability and investor confidence.
- Higher EPS growth supports the potential for increased future dividends.
With solid retained earnings and growth-oriented capital deployment, Geregu Power is well-positioned to enhance shareholder returns.
Macroeconomic & Industry Outlook
1. Rising Electricity Demand & Tariff Adjustments
- Nigeria’s growing power demand and electricity tariff adjustments support Geregu’s long-term revenue potential.
2. Exchange Rate & Inflation Impact
- The naira’s depreciation to ₦1,533 per USD in January 2025may impact fuel and operational costs.
- However, Geregu’s cost control measures and revenue adjustments mitigate inflationary risks.
3. Continued Investments in Power Infrastructure
- Expansion in Nigeria’s power sector reforms benefits Geregu’s growth strategy.
- Government policies supporting private energy investments create opportunities for market expansion.
Strategic Priorities for 2025
1. Strengthening Operational Efficiency & Cost Controls
- Further reducing administrative costs to improve profit margins.
- Enhancing plant automation and maintenance efficiency.
2. Expanding Power Generation Capacity
- Investing in new power plants to boost output and market share.
- Optimizing energy distribution channels to reach more customers.
3. Digital Transformation & Smart Grid Investments
- Deploying AI-driven energy efficiency solutions.
- Expanding digital monitoring systems for real-time power analytics.
Conclusion
Geregu Power Plc’s 2024 financial results highlight strong revenue and EPS growth, reinforcing its market leadership in Nigeria’s power sector.
- Revenue surged 65% to ₦137.13 billion, driven by higher power generation and operational efficiency.
- EPS rose 71% to ₦10.97, reflecting improved profitability and cost management.
- Lower finance costs enhanced net income, boosting investor returns.
- Sustained capital investment supports long-term growth prospects.
With a strong financial foundation, disciplined cost management, and growth-focused investments, Geregu Power is well-positioned for sustained success in 2025 and beyond.