Transnational Corporation Plc’s (Transcorp) operating cash flow surged to N95.65 billion in the first nine months of 2026, from N10.89 billion a year earlier, even as the conglomerate’s borrowings increased by nearly 75 per cent, raising questions about the sustainability of its improving liquidity position.
The company’s unaudited financial statements for the nine months ended September 30, 2026, obtained from the Nigerian Exchange Limited (NGX) on Tuesday, showed that net cash generated from operating activities rose almost ninefold, providing a significant improvement in the cash generated by its business operations despite a decline in revenue and earnings.
The improvement came as revenue fell by 13.3 per cent to N357.38 billion from N412.43 billion in the corresponding period of 2025, while profit after tax (PAT) declined by 17.8 per cent to N75.09 billion from N91.41 billion.
The divergence between weaker earnings and stronger operating cash flow is one of the most notable features of the group’s latest results, suggesting that its reported profit performance does not fully capture the improvement in cash generated during the period.
However, the cash flow figures also reveal that the group’s financial position must be assessed alongside its rising debt obligations, investment commitments and outstanding receivables.
Borrowings Rise to N131.8bn
Transcorp’s total borrowings increased to N131.82 billion at the end of September 2026, compared with N75.46 billion at the end of December 2025, representing an increase of approximately 74.7 per cent.
The increase was driven largely by long-term borrowings, which rose to N105.65 billion from N35.18 billion, while short-term borrowings declined to N26.17 billion from N40.28 billion.
The shift towards longer-term borrowing may indicate a change in the group’s financing structure, although the financial statements alone do not establish the purpose of the additional debt or the terms on which it was obtained.
The cash flow statement showed that Transcorp received N106.54 billion in borrowing proceeds during the nine-month period and recorded N63.92 billion in borrowing repayments, alongside N12.77 billion in interest payments.
These transactions formed part of the group’s financing activities, which recorded a net cash outflow of N13.86 billion, compared with a net inflow of N18.36 billion in the corresponding period of 2025.
The figures highlight the importance of distinguishing between stronger operating cash generation and the wider financing requirements of the business, particularly as the group continues to invest across its power, hospitality and energy operations.
Receivables and Investment Spending Absorb Cash
The improvement in operating cash flow also came alongside an increase in trade and other receivables, which rose to N590.18 billion from N542.10 billion at the end of 2025.
The group’s financial statements disclosed that a significant portion of its trade receivables relates to the Nigerian Bulk Electricity Trading Plc (NBET), reflecting its exposure to payment flows within the electricity market.
The increase in receivables is important because revenue recognised in the income statement does not necessarily translate into cash received during the same period.
The timing of collections can therefore affect the group’s liquidity and its ability to fund operations and investments without additional borrowing.
Transcorp also recorded a net cash outflow of N57.78 billion from investing activities, compared with N22.04 billion in the corresponding period of 2025.
The investing outflow included N45.56 billion spent on financial assets classified as debt securities and N10.82 billion on property, plant and equipment.
Meanwhile, dividend payments increased to N43.71 billion from N10.16 billion in the corresponding period of 2025, representing a substantial cash commitment to shareholders.
These investment and financing requirements help explain why stronger operating cash generation should not be viewed in isolation when assessing the group’s overall financial flexibility.
Cash Position Strengthens Despite Earnings Decline
Transcorp’s cash flow statement showed a net increase of N24.01 billion in cash and cash equivalents during the nine-month period, compared with N7.21 billion in the corresponding period of 2025.
After accounting for the reported foreign exchange effect, closing cash and cash equivalents stood at N42.78 billion in the cash flow statement.
Separately, the consolidated statement of financial position reported total assets of N1.13 trillion at September 30, 2026, up from N1.00 trillion at the end of December 2025. Total equity also increased by 9.7 per cent to N387.77 billion from N353.39 billion.
The group’s profit-before-tax margin improved to 31.2 per cent from 30.2 per cent, indicating that cost management helped it retain a larger proportion of revenue as pre-tax profit despite the decline in sales.
Transcorp attributed the revenue decline primarily to lower power evacuation at Transcorp Power Plc, as transmission infrastructure vandalisation and gas supply constraints limited output during the period.
Takeaways for investors
The combination of higher operating cash flow, growing assets and increased borrowings presents a mixed financial picture.
The improvement in cash generated from operations is a positive development, but the increase in debt and receivables means that the sustainability of the stronger liquidity position will depend partly on continued cash generation, effective collection of outstanding payments and the returns from its investments.
For investors, the central question is whether the group can sustain stronger operating cash flow while meeting its financing commitments and funding expansion across its businesses, particularly if the constraints affecting power generation continue.