Transcorp Hotels' profit rose 5%. Interest from its sister companies made the difference.
Over nine months, revenue fell 3% and the hotels' operating profit slipped. What lifted the bottom line was ₦4.19bn of interest charged to other Transcorp companies, which now owe the hotel group ₦42.8bn. In the same period it took on a new loan at 22%. And in the third quarter on its own, profit fell 19%.
| Revenue | ₦69.46bn |
| Profit after tax | ₦15.54bn |
| Borrowing | ₦54.96bn |
Five things you need to know
- Over nine months, revenue fell 2.6% to ₦69.46bn, while profit after tax rose 4.8% to ₦15.54bn.
- Interest earned from other Transcorp companies jumped to ₦4.19bn, from ₦0.50bn. Without that rise, pre-tax profit would have fallen about 16%.
- Sister companies now owe the hotel group ₦42.8bn, and its receivables rose by ₦39.5bn in nine months.
- Borrowings rose fivefold, from ₦10.5bn to ₦55.0bn, mostly through a new loan at 22% a year.
- In the third quarter on its own, revenue rose 2.7% but profit after tax fell 18.6%.
Two ways of measuring the same nine months
Pre-tax profit was ₦22.53bn against ₦22.40bn. Take out the interest charged to related companies in each year, ₦4.19bn this year and ₦0.50bn last year, and it was ₦18.34bn against ₦21.90bn.
Statement of profit or loss, page 4, and finance income note 10. The second bar is derived. Bar lengths show the size of each change, not its direction.
So how did the hotels actually do?
A little worse than last year. Revenue for the nine months was ₦69.46bn, down 2.6% from ₦71.30bn. Rooms, the biggest line, brought in ₦46.29bn, down 0.8%. Food and drink brought in ₦19.27bn, down 8.3%.
The company kept costs in step. The direct cost of rooms and food served fell faster than revenue, so the rose to 76.8% from 75.8%. Operating expenses fell 1.8% to ₦29.32bn. Repairs and maintenance were cut by almost a third, to ₦2.06bn, while depreciation rose 43% to ₦3.45bn. Operating profit, what the hotels earned before interest and tax, came to ₦24.36bn, down 1.4%.
Then why did profit go up?
Because of what happened below the operating line. The company paid more interest, but it earned far more.
Net finance cost fell from ₦2.28bn to ₦1.45bn, down 36%. On its own that looks like a cheaper balance sheet.
The interest the company paid more than doubled, from ₦2.80bn to ₦5.91bn. What changed was interest earned: ₦4.19bn of it was charged on loans to other companies in the Transcorp group, against ₦0.50bn a year earlier. That is 19% of this year's pre-tax profit.
The cash flow statement records only ₦269.9m of interest actually received, which matches exactly the interest on bank deposits. That implies the ₦4.19bn from sister companies was added to what they owe rather than paid in cash during the period.
Rainingmoney's reading. The figures are disclosed in notes 10 and 33 and the cash flow statement; the filing does not comment on them.
Where did every ₦100 of revenue actually go?
Derived from the statement of profit or loss, page 4, and notes 6, 9 and 10. Bars are scaled to ₦25. A currency loss of ₦0.55 and other income of ₦0.53, net ₦0.02, are not shown as rows.
What changed since last year?
A large new loan, at 22%
Borrowings were ₦10.52bn in December. At 30 September they were ₦54.96bn. Almost all the increase is one facility, listed as a ₦42.92bn loan at 22% a year, maturing in March 2031. The company drew ₦44.48bn in the period, and the loan stood at ₦49.19bn including interest added. ₦19.58bn of total borrowings is due within twelve months.
The money owed to the company quadrupled
Trade and other receivables rose from ₦11.00bn to ₦50.53bn. The related-party note shows ₦42.77bn owed by three group companies: ₦25.26bn by the parent, Transnational Corporation, ₦14.03bn by Transcorp Power, and ₦3.48bn by Transafam Power. That is why ₦15.93bn of cash was used in operations, against ₦18.82bn generated a year earlier.
Shareholders were paid more
Dividends paid in the nine months were ₦13.32bn, or ₦1.30 a share: last year's ₦1.20 final dividend plus a 10 kobo interim. A year earlier the company paid ₦7.58bn over the full year. This year's payment equals 86% of the nine months' profit attributable to shareholders (derived).
What caught our attention
Borrowings up ₦44.4bn. Receivables up ₦39.5bn. Both in the same nine months.
The two movements are close in size and happened together. The filing does not say whether the new loan funded the lending to sister companies, and we can't tell from the statements alone. What we can say is that the hotel group is now paying 22% on its largest loan, earning interest from related companies it has not yet received in cash, and carrying ₦42.77bn of their debt as an asset.
None of this is hidden: every figure is in notes 26 and 33. Lending between companies in the same group is common in Nigerian conglomerates. But for a shareholder in the hotels, it means the result depends partly on how well Transnational Corporation and the power companies pay back.
Rainingmoney's reading. The filing discloses the loan and the related-party balances but does not link them.
Two other things are worth knowing. First, the company's own press release presents these nine-month totals as its "Q3 2026" results. The third quarter on its own, July to September, was weaker. Revenue rose 2.7% to ₦25.04bn, but operating expenses jumped 30% and profit after tax fell 18.6% to ₦5.00bn (page 5).
Second, few shares are in public hands. Transnational Corporation owns 76.16% and the Ministry of Finance Incorporated 11.04%. The is 12.79%, worth ₦380.7bn at ₦290.50 a share.
The tax rate fell to 31.0% from 33.8%, but only because of deferred tax. Current tax, the amount actually due, more than doubled to ₦7.25bn, including a new ₦1.04bn development levy under the Nigeria Tax Act 2025.
The Scorecard
Each label comes from a fixed rule applied the same way to every company we cover. Strong means the measure improved materially against the same period last year. Steady means it held. Watch means it moved against shareholders, or moved without explanation. We publish no single score out of 100, because these categories don't trade off against each other in any honest way.
Did you follow all that?
Revenue fell 3% but profit rose 5%. What made the difference?
Interest income. The company charged ₦4.19bn of interest on loans to other Transcorp companies, up from ₦0.50bn. Take that out of both years and pre-tax profit fell about 16%.
The company made ₦15.5bn of profit. Why did its operations use ₦15.9bn of cash?
Because money owed to it rose sharply. Receivables went from ₦11.0bn to ₦50.5bn, mostly balances owed by sister companies. Profit was booked, but the cash has not come in.
The company calls these its Q3 results. How did the third quarter itself go?
Worse than the nine-month total suggests. July to September revenue rose 2.7%, but operating expenses rose 30% and profit after tax fell 18.6%, to ₦5.00bn from ₦6.14bn.
The Bottom Line
Transcorp Hotels still runs a high-margin business: it keeps ₦76.75 of every ₦100 of revenue after the direct cost of rooms and food. The hotels earned slightly less than last year, and the company paid shareholders more.
But this year's profit growth came from interest charged to its own group, not from the hotels. Borrowings rose fivefold at 22%, and sister companies now owe it ₦42.8bn. How and when they repay is the number to watch in the full-year results.
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