Total Nigeria Plc, one of Nigeria’s major marketers last Friday released its financial statements for 12 months ended December 2017. Revenue declined by 1% from ₦290 billion in 2016 to ₦288 billion. Profit before tax. fell sharply from ₦20.3 billion in 2016 to ₦11.3 billion in 2017. Profit after tax declined by 46% from N14.7 billion in 2016 to ₦8.0 billion in 2017.
Why the decline?
In his speech to shareholders, Chairman of the company, Stanislas Mittelman blamed the poor results on
- The scarcity of PMS due to high landing cost compared to the template.
- FX scarcity hindering the importation AGO & ATK High financial costs due to increase in bank lending interest rates & reduction of our credit terms for PMS purchases.
According to him, the price of PLATT was high making importation of PMS difficult as the landing cost was higher than pump price. The capacity of oil traders to import products was greatly diminished.
In most of 2017, NNPC assumed the role of sole importer of PMS. This led to supply challenges and of course PMS shortages. Notwithstanding pump price remained N145 per litre throughout 2017.
Since June 2016, Total had not been possible to directly buy dollars from the upstream sector and this has made doing business difficult for the company due to challenges procuring dollars for the importation of diesel and kerosene.
In September there was an explosion at the NNPC Apapa jetty which made it impossible for Major marketers to receive products in Apapa until year end
Borrowing cost spiked
Trade finance loans fell from ₦6.3 billion in 2016 to ₦3.5 billion in 2017. This may have led to an increased reliance on bank overdrafts which increased from ₦2.8 billion in 2016 to ₦9.5 billion in 2017. Interest rates on overdrafts also increased from 14% in 2016 to 19% in 2017.
Lubricant Revenue increased
Revenue decreased slightly from ₦251 billion in 2016 to ₦240 billion in 2017. A breakdown of the company’s revenue show revenue from petroleum products declined from ₦251 billion in 2016 to ₦240 billion in 2017. Revenue from lubricants, however, increased from ₦38 billion in 2016 to ₦47 billion in 2017.
The company also increased its market share from 25.7% in 2016 to 28.1% in 2017. Production capacity also increased by 33% with the addition of two (2) High-Speed Filling Machines in Koko, Delta State, and Lagos.
Despite the decline in the result and earnings per share, Total paid a ₦17.00 dividend in 2017 comprising a final dividend of ₦14.00 and an interim dividend of ₦3.00 paid earlier in the year.
Total was incorporated as a private limited liability company in 1956 and then converted to a public company in 1978. Total Raffinage Marketing holds 61.72% of its shared capital, while the rest is held by members of the public.The company is into the blending of lubricants and the sales and marketing of petroleum products.