FRI 29 OCT, 2021-theGBJournal- TotalEnergies Marketing Nigeria Plc Friday reported revenue growth of 102.0% y/y to NGN90.89 billion in Q3-21, the highest Q3 topline outturn – reflecting the increase in demand from last year’s pandemic induced slump, TOTAL’s volume drive in 2021FY and higher product prices (Average PMS price: NGN165.22/litre in Q3-21 vs NGN151.15/litre in Q3-20; Average DPK price: NGN410.58/litre in Q3-21 vs NGN343.35/litre in Q3-20; Average AGO price: NGN253.22/litre in Q3-21 vs NGN222.00/litre in Q3-20). Accordingly, substantial increases were recorded across the business segments – (Network: +19.2% y/y; General Trade: +146.2% y/y; Aviation: +166.1% y/y).
The company scored a standalone EPS of NGN15.67 (Q3-20: NGN3.06) and 9M-21 EPS of NGN39.43 (9M-20: NGN1.47). Adjusting for net foreign exchange gain, the company reported an EPS of NGN10.16, bringing the 9M-21 adj. EPS to NGN33.91.
On a q/q basis, revenue increased by 7.4%, with all business segments – Network (+14.6%) and General Trade (+7.7%) – save for the Aviation segment (-18.4%), recording growth.
Gross margin (-258bps) declined to 16.6% in Q3-21 (Q3-20: 19.2%) as the uptick in crude oil prices (Average Brent price: USD73.23/bbl in Q3-21 vs USD43.34/bbl in Q3-20) led to a faster increase in the cost of sales (108.4% y/y) than revenue. Notwithstanding, adj. EBITDA (+68bps) and adj. EBIT (+244bps) margins came in higher at 8.8% and 6.9%, respectively, facilitated by a 616bps decline in TOTAL’s OPEX margin to 8.9% (Q3-20: 15.1%).
Net finance costs fell by 67.8% y/y, following a 29.3% y/y reduction in finance costs and a 406.7% y/y surge in finance income. We attribute the decrease in finance costs to TOTAL’s less reliance on overdrafts to finance working capital, as disclosed by management in their 2020 Investor Presentation. Thus, overdraft financing as of 9M-21 declined by 92.9% y/y to NGN133.32 million (9M-20: NGN1.88 billion).
Overall, the company recorded an adj. PBT of NGN6.07 billion in the period (vs PBT of NGN1.44 billion in Q3-20). A NGN2.62 billion tax expense resulted in adj. PAT of NGN3.45 billion in the period (vs PAT of NGN1.04 billion in Q3-20).
Analysts describes TOTAL’s performance as ‘’laudable’’ given that earnings have continued to show strong resilience, majorly driven by the company’s strong volume play so far in 2021FY.
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