Geregu Power Plc, a leading power-generating company majority owned by Nigerian billionaire Femi Otedola, reported lower earnings at the end of the first nine months of its 2022 fiscal year due to disruptions in the Nigerian power sector, which impacted the power-generating company’s operations as well as its revenues.
The drop in earnings comes after the company recorded a profit of N20.55 billion ($47.3 million) at the end of its 2021 fiscal year, owing to a double-digit percent growth in revenue.
According to figures in its recently disclosed nine-month financial results, the profits of the Otedola-led firm fell 11.45 percent from N11.33 billion ($26.04 million) in the first nine months of its 2021 fiscal year to N10.03 billion ($23.05 million) in the current reporting period.
The double-digit drop in earnings was largely driven by a drop in revenue from N54.3 billion ($124.8 million) to N39 billion ($89.6 million), owing to a reduction in energy sales and a capacity charge.
This revenue decline was primarily caused by a nationwide force majeure that Shell Petroleum Development Company Limited declared on the Forcados oil terminal pipeline, which significantly impacted the plant’s primary gas supplier’s ability to supply gas in the third quarter of the year.
It went on to say that due to gas supply difficulties, the group’s operations were disrupted, resulting in a decline in capacity provided and energy sent out of 1,314,439 MWh in the first nine months of 2022, compared to 1,855,920 MWh in the same period of 2021.
Despite the drop in earnings, Geregu’s total assets have increased from N114.8 billion ($263.9 billion) to N171 billion ($393 million) since the start of the year, while retained earnings have fallen from N59.94 billion ($138 million) to N48.97 billion ($112.5 million) as a result of the N12.3 billion ($28.4 million) paid out to shareholders.
Geregu Power, which began operations in 2007, is a spin-off subsidiary of the now-defunct Power Holding Company of Nigeria. The power-generating company is now 80-percent owned by Otedola through one of his companies, Amperion Power Distribution Company.
Geregu’s market capitalization had risen by more than $120 million since its shares were floated on the Nigerian Exchange twelve days ago, to N300 billion ($695 million), before falling by more than $62 million on Fri., Oct. 14.
