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Wednesday, November 30, 2022

Total Nigeria reports N163m Q1 loss as revenues slump

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Total Nigeria Plc released its Full Year (FY) 2019 audited results alongside its First Quarter (Q1) 2020 unaudited numbers. The FY’19 audited filing was largely in line with the earlier unaudited release in January – which revealed a 71.4 percent drop in earnings per share (EPS) to N6.71/share. The firm consequently announced a dividend of N6.71/share (6.5% div. yield as at close price).

In the Q1’20 results, Total reported a N163.2 million loss after tax, weighed by the 9.3 percent revenue decline during the period.

Below are the key highlights from the Q1’20 numbers:

 Highlights:

  • Q1’20 sales moderated by 9.3% YoY to N70.2 billion, owing to weakened sales from the Petroleum Products (-10.7% YoY) segment. Lubricants (-2.7% YoY) sales similarly printed marginally lower to N13.1 billion. Analysts say the increased retail expansion from competitors, combined with the activation of social distancing measures within the country due to the COVID-19 outbreak in March led to the drawback in sales. Sales to service stations and aviation customers fell by 9.7% YoY and 39.5% YoY respectively. The corporate customers section, however, rose by 3.7% YoY as major companies continued normal operating hours till the President’s mandatory lockdown order at the end March of 2020
  • Gross profit margin improved by 50 bps to 11.0% during the first quarter, aided by the weakness in crude oil prices following the brief trade fallout between two of the biggest oil producers Saudi Arabia and Russia.
  • While there was improved production efficiency, this failed to filter into operating income due to the 1.7x surge in Technical assistance and Management fees paid to Total Raffinage Marketing. Consequently, operating margin trended lower to 1.3% from 1.8% in Q1’19.
  • Net interest expenses declined by 40.8% YoY to N1.1 billion, reflecting the lower yield environment and the company’s recent deleveraging drive. Total borrowings at the end of Q1’20 stood at N37.7 billion (vs N55.1 billion in Q1’19).
  • Operating cashflow printed at N3.3 billion at the end of Q1’20 compared to a negative N22.4 billion in Q1’19. The turnaround was mainly driven by stringent working capital management. Specifically, Q1’20 Working capital balance was supported by the N10.0 billion reduction in inventories.
  • Overall, the company recorded loss after tax of N163.2 million at end of Q1’20 (Q1’19: -N474.1 million).
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