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Thursday, August 11, 2022

Total Energies Records Strongest Profit Growth Among Bellwether Firms

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TotalEnergies Marketing Nigeria (TMN) Plc has recorded the strongest net profit expansion among the largest firms quoted on the NGX as the reopening of the economy strengthened product demand.

TotalEnergies Marketing net income surged by 2,576.58 percent as at September 2021, according to MoneyCentral calculations.

That compares with Ecobank’s 916.14 percent increases at the bottom line, Transcorp, 671.21 percent;  Presco, 173.44 percent; Okomu, 132.14 percent; United Capital, 72.22 percent; MTN Nigeria, 52.74 percent;  Lafarge Africa, 43.26 percent; United Bank for Africa, 35.61 percent; Dagote Cement, 33.33 percent; Fidelity Bank, 29.92 percent; Sterling Bank, 28.4 percent, Access Bank, 19.45 percent, and Nigerian Breweries, 18.40 percent.

Of course, some fell off the cliff as their profits were beaten down. FBN Holdings net income fell by -24.95 percent; Guaranty Trust Holdings or GTCO, 9.05 percent; Stanbic IBTC Holdings, -39.60 percent; Union Bank, -10.80 percent; Custodian Investment, -16.88 percent, and Dangote Sugar, -41.70 percent.

TotalEnergies has ridden out of the pandemic crisis that undermined earnings. It will be recalled that the company posted its first loss in some many years in 2020.

Analysts had envisaged that the downstream oil and gas giant’s earnings would return to pre-pandemic levels.

However, sector players are operating in a tough and unpredictable macroeconomic environment.

First, the Nigerian National Petroleum Corporation remains the sole importer of petroleum products as sector players are hamstrung by foreign exchange illiquidity.

Second, the non-reflective market conditions are stifling investment flows into the industry, and a foreign investor are on the sidelines. A combination of these challenges means companies will continue to operate on slim margins.

There are propitious developments such as the coming on board on Dangote Refinery and the proposed rehabilitation of local refineries and combined with the implementation of the Petroleum Industry Bill (PIB) are expected to unlock the potentials in the industry.

TOTAL currently leads the Nigerian downstream sub-sector in market share across the various product segments. According to MOMAN market share data, as of H1-20, TOTAL had the largest share across AGO (40.9%) and Lubricants (53.0%), and second-largest market share for PMS (20.0%) and ATK (25.1%).

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