Transcorp Hotels' financial result for the period ended March 31, 2020, has shown a significant drop in the company and group revenue, and with the impact of COVID-19 on hospitality business in Nigeria, Transcorp Hotels has stated that its 2020 financial projection is no longer visible.
According to the Transcorp Hotel's financial statement seen by AllNews, the Group revenue for the first three months of 2020 dropped to N4.17 billion, failing to surpass the N4.18 billion recorded in Q1 2019. Also, the company revenue declined from the N3.99 billion generated in Q1 2019 to N3.98 billion recorded this year's Q1.
During the same period under review, Transcorp Hotel reported that its cost of sales climbed to N1.16 billion for the Group in Q1 2020 from the N1.08 billion recorded last year's Q1. The Company cost of sales also increased from the N1.02 billion recorded in Q1 2019 to N1.09 billion in the first quarter of 2020.
This affected Transcorp Hotel's gross profit for the Group which fell to N3 billion after the first quarter this year, from the N3.10 billion generated in Q1 last year. Also, the gross profit for the Company took a nosedive after failing to surpass the profit of N2.97 billion generated in Q1 2019. The Company was only able to record a gross profit of N2.88 billion in Q1 2020.
What Transcorp has to say about results
Reacting to the impact of COVID-19 on the company's result, Transcorp stated that it's 2020 result will be impacted by Coronavirus, "Transcorp Hotel plc started the year 2020 optimistic with detailed plans and budget to surpass the N20bn revenue performance achieved in 2019.
"With the Global Coronavirus Pandemic, the hospitality industry has been negatively impacted." Transcorp Hotel said in the statement seen by AllNews.
The company added that "Nigeria has witnessed an increase in confirmed cases which led to the closure of airports and flights and an official lockdown of the FCT issued by the Federal Government to ensure the effective combat of the virus. All of these have negatively impacted the hotel and its business activities in this period.
"The Company anticipates that its future results of operations, including the results for 2020, will be materially impacted by the coronavirus outbreak. However, given the speed and frequency of continuously evolving developments with respect to this pandemic, the Company cannot reasonably estimate the magnitude of the impact on its results and its operations, and, if the outbreak continues on its current trajectory, such impact could grow and become material to its liquidity or financial position."