Total Nigeria Plc recorded N500.12 million as Profit After Tax in Q3 2020, against the N204.84 million loss it suffered in the corresponding period last year – a 344% increase.
The information is contained in a recent disclosure sent to the Nigerian Stock Exchange Market today.
In addition, it also recorded an 881% rise in Profit Before Tax (PBT) for the period under view, as PBT increased to N912.89 million, against N116.95 million loss recorded in the corresponding period last year.
On the contrary, revenue during the period under view declined by 32%, from N221.84 billion recorded in Q3 2019 to N151.71 billion in Q3 2020.
What this means
The reason for the mixed result in terms of the dip in revenue and a non-corresponding increase in profit is largely due to a drastic reduction in costs. This simply means that the firm was able to manage its costs very well despite recording lower revenue.
For example, the firm was able to do the following:
- Reduce its cost of sales to about N66.06 billion, from N196.74 billion as of Q3 2019 to N130.68 billion in Q3 2020 – indicating a 33.6% reduction.
- Reduce its finance cost by 58.25% and increase its finance income by 664.3%.
- The number of staff also reduced by 6%, hence impacting administrative costs.
- Interest on bank loans and overdraft remarkably declined by approximately 64.0%.
- On the flip side, the impact of the lockdown period, due to the spread of the pandemic, affected the revenue of the firm, which may have accounted for the 32% dip in revenue for the period under view.