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Improving Lives, Transforming Nigeria

Presentation to Analysts. Improving Lives, Transforming Nigeria. HALF YEAR, 2018. RC  611238. Content.

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Improving Lives, Transforming Nigeria

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  1. Presentation to Analysts Improving Lives, Transforming Nigeria HALF YEAR, 2018 RC 611238

  2. Content

  3. From time to time, Transnational Corporation of Nigeria Plc (“Transcorp”) and its subsidiaries (“the Group”) make written and/or oral forward-looking statements, including in this presentation and in other communications. In addition, representatives of the Group may make forward-looking statements orally to analysts, investors, the media and others. All such statements are intended to be forward looking statements. Forward looking statements include, but are not limited to, statements regarding the Group’s objectives and priorities for 2018, and beyond and strategies to achieve them, and the Group’s anticipated financial performance. Forward looking statements are typically identified by words such as “will”, “should”, “believe”, “expect”, “anticipate”, “intend”, “estimate”, “may” and “could”. By their very nature, these statements require the Group to make assumptions and are subject to inherent risks and uncertainties, general and specific. Especially in light of the uncertainty related to the financial, economic and regulatory environments, such risks and uncertainties – many of which are beyond the Group’s control and the effects of which are difficult to predict – may cause actual results to differ materially from the expectations expressed in the forward-looking statements. Risk factors that could cause such differences include: exchange rate, market exchange, and interest rate, operational, reputational, insurance, strategic, regulatory, legal, environmental, and other risks. All such factors should be considered carefully, as well as other uncertainties and potential events, and the inherent uncertainty of forward looking statements, when making decisions with respect to the Group and we caution readers not to place undue reliance on the Group’s forward looking statements. Any forward looking statements contained in this presentation represent the views of management only as of the date hereof and are presented for the purpose of assisting the Group’s investors and analysts in understanding the Group’s financial position, objectives and priorities and anticipated financial performance as at and for the periods ended on the dates presented, and may not be appropriate for other purposes. The Group does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by or on its behalf, except as required under applicable securities legislation. The information used in the presentation is obtained from several sources the Group believes are reliable. Whilst Transcorp has taken all reasonable care to ensure the accuracy of the information herein, neither Transcorp nor its subsidiaries/affiliates makes representation or warranty, express or implied, as to the accuracy and correctness of the information, Thus, users are hereby advised to exercise caution in attempting to rely on these information and carry out further research before reaching conclusions regarding their investment decisions. Disclaimer 1

  4. Outline KEY BUSINESS DRIVERS FINANCIAL REVIEW OVERVIEW 3 5 7 QUESTIONS & ANSWERS OUTLOOK APPENDIX 30 29 21 2

  5. Overview 5

  6. Overview of the Company • Transcorp Hilton Abuja - No. 1 hotel asset in Nigeria - 670 rooms, 5 hotel • Transcorp Hotels Calabar – 132 room, 3 hotel • Hilton Ikoyi (320 room, 5)& Hilton PH (250 room, 5) under development Hotels Power OPL281 83% ownership • c.972MW gas fired power plant • Present available capacity of 677.8MW • Medium term capacity target of 2500MW Diversified Conglomerate with a growth agenda 50.01 % ownership • Owner/operator of OPL 281 oil block • Reserve estimates Oil - 189.73Mn stock tank barrel • Gas – 377.48Bn std cubic feet • Exploration commences in 2019 100 % ownership 4

  7. Key Business Drivers 5

  8. Key Trends Driving Our Business • CBN policy initiatives such as the I&E window has helped liquidity of FX • Improved access to FX for debt service and rehabilitation of turbines • No substantial FX loss anticipated by year end based on CBN policy direction • Higher occupancy due to more completed floors (Compare to Q2 2017) Driving business growth for Hospitality Stabilising foreign exchange regime Improved gas supply driving generation NBET N701bn PAP • The Payment Assurance Plan (PAP) window continues. • TPL was paid up to 80% of 2018 invoices as guaranteed under the PAP. This is inclusive of 90% of gas invoice paid directly to suppliers • Outlook is to fast track payment to current month. • Improved gas supply, driven by a) tactical engagement of suppliers b) infrastructural improvements by suppliers and c) improved payments to suppliers via PAP, led to generation increase • Capacity Utilisation grew to 81% in Q2 2018 (Q2 2017: 53%) while Average Generation grew to 531MW (Q2 2017: 311MW 6

  9. Financial Review 5

  10. Result Snapshot A solid performance underpinned by sustained momentum in the growth of our businesses 8

  11. Key Ratios 9

  12. Group - Income Statement 10

  13. Group - Assets 11

  14. Group - Liabilities 12

  15. Income Statement (QoQ) 13

  16. Segment Review 5

  17. Segment Review – Hospitality 15

  18. Segment Review – Hospitality 16

  19. Segment Review – Hospitality ADR –Average Daily Room Rate RevPAR –Revenue per available room 17

  20. Segment Review – Power 18

  21. Transcorp Power Ltd POSITION AS NIGERIA’S TOP GENCO (MWh) APRIL JUNE MAY 19

  22. Segment Review – Power 20

  23. Outlook 5

  24. Q3 2018 Closing Expectations Agenda Implication Business • Transcorp Hilton Abuja Operations • Target effective occupancy of 70-80% • Maintain differential level of service excellence • Leverage upside (traffic & pricing) from pre-election activities and conclusion of upgrade • Transcorp Hilton Abuja Upgrade • Conclusion of upgrade (rooms, public areas and external works) • Transcorp Hotels Calabar • Maintain profitability track record • Continue cost management initiatives • Aggressive marketing aligned with competitive pricing • Increased market coverage • New revenue sources • Market share protection Hospitality • Target 800MW available capacity and generated power of 600-650MW. Militating factors like liquidity, gas, foreign exchange and transmission are improving • Increased revenues • Portfolio optimization Power OPL 281 • Commence exploratory drilling activities • Contribution expected in 2019/20 22

  25. Q3 2018 Closing Expectations Q2 Actual Q3 Target Business Hospitality Power 23

  26. Our Journey So Far • TPL: • Achieve 2500MW Available Capacity • THP: • Business expansions in strategic locations • OPL 281: • Production of oil and gas • Expand into infrastructure development • Expand into Africa • Transcorp Ughelli Power • emerges preferred bidder for Ughelli Power Plc (UPP) in 2012 • Execution of management agreement with Hilton for Transcorp Hilton Ikoyi in 2013 • Execution of Production Sharing Contract on OPL 281 in 2014 • Management Agreement for Hilton Port Harcourt executed in 2014 • Transcorp Hotels N20bn bond issuance in 2015 • Commenced full Upgrade Project for Transcorp Hilton Abuja in 2016 • Commissioning of Teragro Fruit juice concentrate plant in 2012 • Successful takeover of UPP in 2013 • Transcorp Hotels IPO in 2014 • Award as the Most Compliant Firm in Nigeria by the NSE in 2014 • Transcorp Power commissioned GT 15 a 115MW Gas Turbine in 2017 • Transcorp was incorporated in 2004 • Acquisition of NICON Hilton Hotel Abuja in 2005 • Listing on the Stock Exchange in 2006 • Acquisition of Metropolitan Calabar in 2009 • Heirs Holdings becomes core investor 2011 PHASE ONE 2004 - 2011 PHASE TWO 2012 - 2017 PHASE THREE 2018 - 2022 2 1 3 24

  27. Hospitality Beyond 2027 2027 2022 Be the No. 1 hospitality brand with presence across Africa Complete construction of retail and office mixed use complex, Abuja Expansion in the mid-market segment in Nigeria and beyond Construction of 200 unit apartment complex , Abuja Construction of 5,000 seater conference and event center in Abuja • Renovation and upgrade of Transcorp Hilton, Abuja • Expansion of the conferencing facility within Transcorp Hilton Abuja • Upgrade of Transcorp Hotel, Calabar • Construction of 320 room Hilton branded hotel, Ikoyi • Construction of 250 room Hilton branded hotel in Port Harcourt • Expand within the hospitality industry beyond Hotels. 28

  28. Power 2027 Beyond 2027 2022 • Commence investment in Greenfield power plant in Nigeria • Develop new IPP expansion projects in the South-South and South-East captive areas in the vicinity of TPL • Make opportunistic acquisition of sub-par power plant in Nigeria • Complete IPP expansion projects in the South-South and South-East • 2. Acquire interest in a Brownfield or Green field power plant in Africa • 3. Increase capacity of East African Plant to 400 MW • 4. Generate and control 30% of the electric power generated in Nigeria by 2027 Be the No. 1 in power in Nigeria and across Africa by 2026 with Turnover and Profit in excess of US$1.3 Billion and US$500 million respectively Contribute 25% of power consumed in Nigeria 28

  29. Oil & Gas Beyond 2027 2027 2022 Complete Acquisition of 2 additional assets Begin development of petrochemical plant Begin development of fertilizer plant Acquire gas plants Complete petrochemical plant to drive generation of US$5 Billion in revenues Stabilize production at OPL 281 to 10,000 bpd • Participate in bid rounds with a view to acquiring 2 more assets • Commence production on OPL 281 at a minimum of 4000 bpd 28

  30. Questions & Answers 5

  31. Appendix – Business Update 5

  32. Overview A Short Story of Execution Listed Company with over Diversified conglomerate with a growth agenda We acquired the Ughelli power plant in November 2013, as part of Transcorp Plc’s commitment to improve lives and transform Nigeria by powering homes, schools, public utilities and businesses. The Bureau of Public Enterprises gave us a target to increase power generation from 160MW to at least 670MW in 5 years. We surpassed this expectation 12 months ahead of schedule, generating 701MW by November, 2017. 300,000 shareholders With a Purpose of Deeply rooted values are the 3Es of Execution, Enterprise and Excellence Improving Lives, Transforming Nigeria 31

  33. Transcorp Hotels Plc 32

  34. OPL 281 OPL 281 – Hydrocarbons in Place • SACOIL Update • The partnership discussion with Sacoil is continuing • Drilling/Operations Update • The Drilling permit has been revalidated by DPR and approval feedback sent to NAPIMS. • Rig Inspection • A rig has been identified for exploratory drilling of Obote 2x well and engagement has advanced, subject to NAPIMS approval • Following NAPIMS request, the identified rig has been rescheduled for a re-inspection to certify the ‘warm-stacked’ operability & functionality and the  re-negotiation of the drilling budget. 33

  35. Contact: MutiuBakare mutiu.bakare@transcorpnigeria.com Instagram @transcorpnigeria @Transcorphotelsplc @transcorphotelscalabar Facebook Transcorp Nigeria Plc Transcorp Hotels Calabar Transcorp Hotels Plc Twitter @TranscorpPlc @TranscorpHotels @TranscorpHotelsCalaba Websites www.transcorpnigeria.com www.Transcorppower.com

  36. THANK YOU

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