Seplat Energy, Total Energies, and Ardova led the list of oil marketers in Nigeria with the highest personnel expenses in the first half of the year, according to findings by Nairalytics, the analytics arm of Nairametrics.
According to the statements of these five oil marketers listed on the Nigerian Exchange (NGX), they spent a sum of N17.2 billion as employee costs/personnel expenses between January and June 2022, representing a 14.4% increase compared to N15.04 billion recorded in the corresponding period of 2021.
Notably, personnel expenses include wages and salaries, employee pension contributions, and other short and long-term employee benefits. The Nigerian labour market has grown more competitive in recent times, with multinationals poaching experienced employees from the country, while the need to travel abroad for a better life has also seen many Nigerians leave their jobs to travel overseas.
It has now become imperative for businesses to influence employee loyalty. One of the ways that has been identified as a tool to improve employee loyalty and competitiveness, is to regularly review the pay of their staff. Hence, the upward movement in staff expenses.
A further breakdown of the data showed that Ardova Plc recorded the highest increase in their staff costs on a year-on-year basis, with 16.3% increase while MRS Oil recorded the lowest growth in the review period.
Top 5 ranking
- Seplat Energy maintained the top spot on the list with a total employee spend of N8.61 billion in the first six months of the year, which is 16.27% higher than the N7.41 billion recorded in the corresponding period of 2021.
- Total Energies followed with a total staff cost of N5.93 billion. Representing a 15.35% increase when compared to N5.14 billion recorded in the same period of 2021. The breakdown of the company’s staff expenses shows that the N5.93 billion also included termination benefits, medical expenses, training expenses, temporary staff etc.
- Ardova Plc spent N1.48 billion on personnel expenses in H1 2022, which is 16.3% higher than the N1.27 billion recorded in the previous year. Interestingly, salaries, wages, and allowances paid by Ardova Plc surged in the review period, as salaries increased by 63.4% to N1.06 billion, the breakdown includes contributions to pension fund scheme, gratuity and redundancy cost, training, medical expenses, and other personnel costs.
- Others on the list are, Conoil Plc with a staff cost of N989 million, while MRS Oil recorded a staff cost of N197.8 million in the period under review.
Bullish oil market spur record earnings
- The companies rode on the bullish crude oil market to post impressive growths in their top line. Specifically, the aggregate revenue of the listed companies (Ardova, Conoil, MRS, Seplat Energy, and TotalEnergies) surged by 41.2% to N653.8 billion in H1 2022 from N462.9 billion recorded in H1 2021.
- Crude oil prices rallied significantly in the first quarter of the year after Russia invaded Ukraine in February 2022, and other world economies placed trade sanctions on Russia, triggering a chain of events, which has caused elevated gasoline prices across the world.
- In the same vein, oil marketers were able to improve their gross earnings largely due to the increased petrol prices. Seplat Energy which operates mainly on the upstream sector recorded an 82% growth in its revenue, from N120.4 billion recorded in H1 2021 to N219.2 billion in H1 2022.
- Ardova Plc also followed in the same direction, with a 46% revenue growth year-on-year to N126.65 billion, while Total Energies recorded a 38.1% increase to N209.01 billion. Meanwhile, Conoil Plc recorded a 16.8% revenue decline to N56.2 billion in the review period.
Big industry players and big spenders
The Nigerian oil and gas sector is like many other industries where the big firms tend to incur higher staff costs compared to the smaller companies. Seplat Energy, which is the largest Nigerian quoted oil and gas firm spent the highest on employee expenses relative to other companies in the same sector.
With an aggregate employee cost of N8.61 billion incurred in the first half of the year, to its 532 employees, this represents an average of N16.2 million per staff.
TotalEnergies, the second largest oil and gas firm, followed in terms of aggregate employee cost and average pay per staff of N5.93 billion, and N13.6 million respectively, for the first six months of the year.
On the other hand, MRS Oil with a staff strength of 91, recorded an average employee cost of N2.2 million for the six months, while Conoil paid an average of N1.5 million per staff to its 664 employees between January and June 2022.