Dipo Olowookere
Local rating agency, Global Credit Ratings (GCR), has affirmed national scale ratings of A-(NG) and A2(NG) in the long term and short term respectively on Transcorp Hotels Plc, the hospitality subsidiary of Transnational Corporation of Nigeria Plc (Transcorp).
A statement issued by GCR said it accorded stable outlook on the owner of the iconic Transcorp Hilton Abuja and Transcorp Hotels Calabar.
It further said it put A-(NG) ratings on the Series 1 N10bn Fixed Rate Bond and Series 2 N9.8bn Fixed Rate Bond of Transcorp Hotels, with both notes having 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.
“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,” the domestic rating firm said.
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.
