Geregu Spikes to N325 from N100 per Share in Oct
Geregu Power Plc, a company chaired by Femi Otedola, fair valuation has increased strongly as the market continues to see value and potential for growth in its key business segments. Its financial scorecard for 2022 showed that the company’s earnings declined.
However, there was strong capital investment fueling positive sentiment about future earnings growth. In part, the power-generating company’s first dividend payment announcement since it became a listed company appears attractive to some value hunters in the domestic bourse.
Last week, Geregu Power Plc gained more than 31%, consolidating on previous capital gain reported. Within five months after it became a listed company, Geregu Power Plc.s’s valuation has increased to N812.50 billion over 25 billion shares outstanding at a market price of N325. It was valued at N250 billion in October 2022 when it was listed.
In the stock market, the share price of the company has jumped more than three at the close of trading sessions last week. Some analysts attribute the development to strong positioning by value hunters ahead of dividend payments.
Following its announcement to pay dividends after shareholders’ approval is obtained at its annual general meeting scheduled for March 29, Geregu Power Plc share has continued to gain popularity in the Nigerian bourse.
Daily Global News reported that in October 2022, the company was listed at N100 per share on the Nigerian Exchange. The increase came despite its weak earnings.
Though, the company recorded a strong year-on-year decline in the top and bottom line following disruption in its business line, the board of directors recommend N8 dividend per ordinary share for shareholders with February 27 as the qualification date, its audited statement shows.
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 attributes 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.
It said in the audited report that the maintenance works on the pipelines were however completed at the end of November 2022 and gas supplies and normal operations have since then resumed.
Recall that in 2021, the FGN divested the remaining 20% shareholding to Amperion thereby making Amperion Power Distribution Company Limited the 100% owner of Geregu Power Plc.
With this development, FGN has ceased to be a shareholder of Geregu Power Plc. The Company was listed on the main board of the Nigerian Exchange Group on 05 October 2022, according to the audited report.
At the meeting, shareholders will vote to re-elect Olufemi Otedola CON and Christopher Adeyemi, directors retiring by rotation. # Geregu Spikes to N325 from N100 per Share in Oct.
