Geregu Power’s Full-Year Profit Dips To N27bn After A Weak Q4

Cost increases that undermined profit improvement for Geregu Power Plc in the third quarter intensified in the final quarter, consuming revenue and trimming the bottom line to N27.2 billion for the full year.

A slight improvement in profit at the end of the third quarter gave way to a slight decline, permitting only a marginal top-up of the closing third quarter profit of N25 billion.

The company’s audited financial report for the full year ended December 2025 shows that rising costs drained revenue, slashing profit margin from 19 per cent at the end of the third quarter operations to 14.7 per cent at full year.

While the final quarter contributed N53.4 billion in sales revenue or 29 percent of the roughly N185 billion turnover for the year, it accounted for only N2.2 billion of the full year profit of N27.2 billion.

Pressure from costs ruled the electric power generating company’s operations in the second half of the year and the period contributed only N7 billion of the profit for the full year.

Pressure from cost came from all the company’s three operating levels: production, administrative and financing.

Production cost increase overtook sales revenue growth in the year, which squeezed the gross margin. Against an increase of 34.8 per cent in sales revenue to about N185 billion during the year, cost of production rose by 49 per cent to N110.7 billion.

The cost of generating the naira of the company’s revenue therefore grew from 54 kobo in 2024 to 60 kobo in 2025. Gross margin went down from 46 per cent to 40 per cent over the period and permitted an increase of 18 per cent in gross profit to N74 billion for the year.

Administrative cost surged in the final quarter from only N7.3 billion at the end of the third quarter to close at N17.8 billion at full year, changing its position from cost saving to revenue consuming line. It grew by 82 per cent in the year, claiming a significantly increased proportion of sales revenue.

Operating profit margin got the squeeze despite that other loss of about N584 million in the previous year turned into other income of N1.8 billion in 2025.

An upsurge in cost also came from impairment loss on receivables that jumped from N4.7 billion at the end of the third quarter to stand at over N10 billion at full year.

Operating profit improved by 12 per cent to N48 billion at the end of the 2025 operations. Less than N8 billion of the operating profit for the year was earned in the final quarter.

Finance expenses, the third level revenue consuming line, claimed virtually all the gains in operating profit, as finance income dropped and finance expenses grew.

At N6.4 billion, finance income went down by 24.8 percent over the period, but cost of finance grew from N10.2 billion to N12.6 billion.

Net finance expenses therefore multiplied more than three and half times from N1.7 billion to over N6 billion in the year. The company’s interest-bearing debts increased from N65.8 billion at the end of 2024 to N68 billion at the end of 2025.

At N27.2 billion, the company’s full after-tax year profit is slightly down from the profit of N27.4 billion it posted in 2024.

The company failed to keep profit elevated for the third year running in 2025 after two years of recovery from more than one-half plunge to N10 billion profit in 2022.

The company closed the 2025 full year with earnings per share of N10.90, slightly down from N10.97 per share in the previous year. The board has announced a cash dividend of N9 per share to shareholders.