Geregu Power Plc, a leading player in Nigeria’s electricity generation market, has seen its market capitalization soar to N2.8 trillion in September 2024, driven by robust investor confidence and a positive market outlook.
The company’s stock has demonstrated remarkable growth this year, crossing the N1 trillion threshold on January 15, 2024, following a 7.52% rise in share price, which placed it in the exclusive “SWOOT” (Stocks Worth Over One Trillion) club. After a period of stagnation between April and August, Geregu’s stock resumed its upward trajectory in September, achieving a 7.7% increase in market cap.
Since its listing on the Nigerian Exchange in October 2022, Geregu Power has enjoyed a stunning bullish run, with its stock appreciating over 700% from its initial trading price. The year began with significant gains, including a notable 72% increase in February, when the share price jumped from N568 to N977 on a trading volume of 17 million shares. Despite a slowdown in activity from April to August, the stock rebounded in September, posting a 15% gain by the third week, with 2.5 million shares exchanged.
A key factor behind Geregu Power’s strong performance is its strategic partnership with Siemens Energy, established through a Memorandum of Understanding (MoU) on May 29, 2024, aimed at expanding the capacity of the Geregu 1 power plant. This collaboration is expected to enhance sustainable and efficient power generation, positioning Geregu as a leader in Nigeria’s energy landscape. Following this, Geregu released its H1 2024 financial results on July 13, reporting a pre-tax profit of N30.2 billion, a remarkable 145% increase from N12.3 billion in the same period in 2023. While the market did not initially react, bullish sentiment returned in September, driving a 15% stock increase.
At the company’s 12th Annual General Meeting in Lagos, Chairman Femi Otedola expressed optimism about the future, stating, “In 2024, Geregu Power aims to align our operations with global trends towards affordable, clean, and efficient energy systems.” Patrick Ajudua, President of the New Dimension Shareholders Association, praised the company’s dividend policy, highlighting that Geregu consistently pays dividends exceeding earnings per share (EPS), with N8.00 declared this year despite an EPS of N6.25.
In its latest earnings forecast for Q4 2024, Geregu Power projects revenue of N61.46 billion for the quarter, representing a 103% rise from Q2. The company also anticipates a pre-tax profit of N11.07 billion, compared to N8.25 billion in Q2 2024. With its expanding market cap and strategic initiatives, Geregu Power is well-positioned to capitalize on Nigeria’s evolving energy sector and continue delivering value to its shareholders.
Credit: Nairametrics (Text Excluding Headline)