Geregu Power Plc’s Financial Performance: A Deep Dive into H1 2025 Results
Geregu Power Plc, a key player in Nigeria’s power sector, has released its unaudited interim financial statements for the first half of 2025, showcasing a mixed bag of positive revenue growth and escalating costs. While the company achieved a marginal increase in profit after tax, reaching N20.18 billion compared to N20.01 billion in H1 2024, a closer examination reveals underlying challenges and strategic financial decisions. The company’s revenue growth to N87.63 billion, a notable increase from N80.68 billion in the corresponding period of the previous year, reflects enhanced electricity sales and operational efficiencies. However, this positive momentum was somewhat offset by a significant rise in the cost of sales, surging to N51.88 billion from N39.20 billion in H1 2024, impacting the overall profitability picture.
A deeper analysis of Geregu Power’s cost structure reveals key factors contributing to the increased expenses. The cost of sales, which represents the direct costs associated with generating and delivering electricity, witnessed a substantial jump, likely driven by factors such as rising fuel prices, maintenance expenses, and other operational costs. This increase in the cost of sales directly impacted the company’s gross profit, which decreased to N35.75 billion from N41.47 billion in H1 2024, highlighting the pressure on margins despite the revenue growth. Furthermore, administrative expenses also saw a year-on-year increase of 14%, reaching N5.18 billion. Coupled with a significant surge in impairment losses on financial assets to N6.08 billion from N505.25 million in H1 2024, these rising costs contributed to a decline in operating profit to N15.02 billion from N29.69 billion in the prior year.
The company’s financial position reveals a complex interplay of rising assets and liabilities, alongside a substantial dividend payout. Total assets grew to N267.60 billion from N243.47 billion at the end of 2024, primarily driven by a significant increase in trade and other receivables. This growth in receivables, while contributing to the overall asset base, also raises questions about the efficiency of cash collection and potential credit risks. Concurrently, total liabilities also increased to N216.10 billion from N190.91 billion, reflecting the company’s financing strategies and operational needs. A noteworthy aspect of Geregu Power’s financial activities during this period was the declaration and payment of a N21.25 billion dividend. This substantial payout, exceeding the company’s retained earnings of N20.18 billion, led to a reduction in retained earnings to N50.28 billion as of June 30, 2025. This decision, while potentially rewarding for shareholders, also raises questions about the company’s reinvestment strategy and long-term growth plans.
Delving further into the balance sheet dynamics, the composition of liabilities reveals shifts in the company’s debt profile. Non-current liabilities decreased to N36.87 billion from N47.53 billion, primarily due to a reduction in bond payables and borrowings. This suggests a deliberate effort to reduce long-term debt obligations, potentially to improve financial stability and reduce interest expenses. Conversely, current liabilities saw a substantial increase to N179.23 billion from N143.37 billion, largely driven by a rise in trade and other payables, current tax payable, and short-term borrowings. This increase in current liabilities indicates potential pressures on short-term liquidity and requires careful management to ensure smooth operations and debt servicing.
The company’s cash flow statement provides further insights into its financial health. Cash and cash equivalents decreased slightly to N39.57 billion from N39.94 billion at the beginning of the year, primarily due to dividend payments and loan repayments. However, the company generated a healthy N29.63 billion in cash from operating activities during the first half of the year, demonstrating its ability to generate cash from its core business operations. This positive cash flow from operations is crucial for meeting short-term obligations, funding investments, and supporting future growth. Despite the pressure on profitability due to rising costs, the positive operating cash flow provides a degree of financial resilience.
Looking back at the full-year performance of 2024, Geregu Power reported a profit before tax of N41 billion, a significant 69% increase from N24 billion in 2023. This strong 2024 performance underscores the company’s growth potential and ability to generate profits, providing a context for understanding the H1 2025 results. The challenges faced in H1 2025, particularly the escalating costs, need to be addressed strategically to sustain profitability and achieve long-term growth. The company’s performance in the remaining half of 2025 will be crucial in determining its overall financial trajectory and demonstrating its ability to navigate the challenges and capitalize on the opportunities in Nigeria’s dynamic power sector. The management’s ability to control costs, improve operational efficiency, and manage its debt effectively will be key factors to watch in the coming months.
