Geregu Headed North, Gains 117% ahead of AGM

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Geregu Headed North, Gains 117% ahead of AGM
Femi Otedola, Geregu Power Plc Chairman

Geregu Headed North, Gains 117% ahead of AGM

Geregu Power Plc leads as one of the stock market best performers with about 117% gain from the beginning of the year to date, according to trading data from the Nigerian Exchange.

It is one of those stocks value hunters search for in the local bourse. Last week, the company’s share price jerked up to N324 from N304 at the beginning of the week. The demand came after Geregu Power forecasted an earnings target for the first half of 2023.

In Oct. 2022, the power-generating company chaired by Femi Otedola listed 2.5 billion outstanding shares in the equities segment of the Nigerian Exchange at N100.

At the listing date, the stock market placed a N250 billion valuation on the company. Thereafter, its profit has not been impressive due to the effect of oil assets shutdown in the period.

The company’s Annual General Meeting (AGM) comes on Monday 28 March where shareholders will decide if the dividend will be paid on Wednesday, March 29, 2023, or Tuesday, April 4, 2023, at the rate of N8 per every ordinary share

Document posted on Nigerian Exchange by the company showed that between April and June, Geregu Power Plc estimated its profit will print at N4.84 billion from a revenue expectation of N18.176 billion in the period.

It projected less than N262 million as its net finance costs for the three months ending in June following an expectation that its finance income will settle at N2.837 billion against the finance cost estimate of N3.089 billion.

The company expects its cash position to be positive. Cash from its three months operation is expected to be more than N900 million with moderate net cash used for capital projects worth N3 billion, the impact of which is expected to be reduced by inflow from placements. 

In its 2022 financial statement submitted to the Nigerian Exchange, the company’s profit fell by more than 50% to N10.171 billion, from N20.550 billion. This followed an apparent decline in activities level.

Geregu’s revenue slumped to N47.619 billion at the end of 2022, a decline of 32.89% when compared with N70.956 billion in the corresponding year in 2021.

The company said in its financial statement that energy sold declined year on year to N30.252 billion, down 33.80% from N45.696 billion in the corresponding period. Similarly, revenue from capacity charge nosedived to N17.367 billion from N25.260 billion.

Geregu attributed the decline in topline to nationwide force majeure (FM) declared by Shell Petroleum Development Company Limited on the Trans-Forcados pipeline and its consequent effects on the Forcados oil terminal, gas supplies to the plant by Its primary gas supplier ceased from 17th of July 2022.

In February, the Fund for Export Development in Africa (FEDA), an impact development arm of the Africa Export and Import Bank purchased 5% of Geregu Power shares. The company said the purchase of the shares was concluded on the 21st of February 2023.

With this purchase, FEDA now currently holds 5% of Geregu Power Plc Shares. #Geregu Headed North, Gains 117% ahead of AGM

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