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Eterna Oil Returns to Annual Profit as Expansion Drive Payoff

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Eterna Oil Plc has turned to annual profit, which validates the downstream oil and Gas Company’s aggressive drive into Aviation Fuel, Low Pour Fuel (LPO) as it seeks to expand its share of the market.

Posting a profit amid a tough and unpredictable macroeconomic environment is an upside for the firms’ shares because it will be paying dividends to itsm shareholders and a future expansion plan is an indication of future stream of cash-flows.

For the year ended December 2022, Eterna Oil posted a profit after tax (PAT) of N1.76 billion from a loss of N1.10 billion as at December 2021.

Despite the supply constraints in the energy climate that led to the increase in shipping, cargo, and logistics costs, Eterna Oil’s operating profit surged by 1,119 percent to N3.06 billion in the period under review from N236.46 million the previous year.

Operating profit margin increased to 2.61 percent in the period under review from 0.28 percent as at December 2021.

Revenue spiked by 42.90 percent to N117.45 billion in December 2022 from N82.16 billion the previous year.

A breakdown of the top line (sales) shows revenue from Fuel, which make up 82.23 percent of total revenue figure, was up 50.85 percent to N97.27 billion as at December 2022.

Eterna benefited from higher crude oil price which translated to deregulated retail price of deregulated petrol products staying elevated. And the upside about the company’s stock is that improved economic activities are expected to bolster future earnings.

The average retail price of a litre of automotive gas oil (AGO), otherwise known as diesel, in December 2022, was N817.86 per litre, an increase of 182.64 per cent from N289.37 recorded in the same month in 2021.

The National Bureau of Statistics (NBS) AGO Price Watch for December 2022 shows that the price of diesel has risen consistently for 11 consecutive months last year after it dropped from N289.37 in December 2021, to N288.09 in January 2022.

Analysts say operators in the downstream oil and gas industry will benfit from the complete deregulation and liberalisation of the sector as foreign exchange crisis hinders them from importing the Premium Motor Spirit (PMS) otherwise known as petrol.

Eterna Oil said it would continue to grow its retail footprints and add to the number of its retail outlets in the country, which stood at 61 as at December 2021.

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