Transcorp Hotels Plc Retains Positive A- (NG) GCR Rating
Transcorp Hotels Plc, the hospitality subsidiary of Transnational Corporation of Nigeria Plc (Transcorp) and owner of the iconic Transcorp Hilton Abuja and Transcorp Hotels Calabar, has retained its national scale ratings at A-(NG) and A2(NG) in the long term and short term respectively, with the outlook accorded as Stable. Concurrently, the national scale ratings accorded to the following Issuances were also affirmed:
• Series 1 N10bn Fixed Rate Bond: A-(NG), Stable Outlook
• Series 2 N9.8bn Fixed Rate Bond: A-(NG), Stable Outlook
According to GCR, the rating reflects Transcorp Hotels ability to maintain its market position as a leading brand in Nigeria’s hospitality industry, supported by the major renovation and facilities upgrade at Transcorp Hilton Abuja (‘THA’) and the subsequent improvement in pricing and occupancy rate. The available support to Transcorp Hotels as a member of Transnational Corporation of Nigeria Plc (“Transcorp”), and the partnership with Hilton Worldwide Limited (“Hilton”) is considered a rating positive.
In the report released in August of 2019, it stated “Following the upgrade at THA and the accompanying repricing of the hotel facilities in FY18, revenue improved across all service lines, with rooms and food and beverages rising 26% and 28% respectively. Per management, the Company is currently exploring other opportunities and add-on services that could be offered to boost overall earnings going forward. The average occupancy rate in 1Q FY19 stood at about 61%, albeit still well ahead of the industry average of 53%. Revenue from room lodging grew by a moderate 5% YoY in 1Q FY19, while food and other services rose 18% and 23% respectively. ”
GCR in its report affirmed that Transcorp Hotels demonstrated a stable outlook in its businesses and the ability to maintain a positive rating in the longer term.