Shares of MRS Oil Nigeria Plc (CHEVRON) have increased by over 36% month-to-date on the Nigerian stock exchange, bringing its year-to-date performance to 71.42%.
On October 29, the company released its third-quarter earnings report, showing a pre-tax profit of N6.2 billion—an increase of 108.9% from N3 billion in 2023.
Revenue rose by 141.90% to N169.5 billion, contributing to a year-to-date total of N248.7 billion, with sales of Premium Motor Spirit representing over 85% of the revenue.
Following the earnings announcement, the stock experienced a period of stagnation throughout November, with little notable price movement.
However, on December 12, bullish activity resumed, leading to four consecutive days of gains and positioning MRS Oil Nigeria Plc among the top advancers on the Nigerian Exchange for the third week of December.
Market trend
MRS Oil began 2024 on a positive note, continuing the momentum from the previous year.
- The stock opened in January at N105 per share and rose to N126, with a trading volume of 2 million shares.
- February saw further gains, closing at N135 as it entered the N130 range.
- However, from March to November, the stock experienced limited price movement, reflecting decreased market activity in the second and third quarters.
- In mid-December, the stock gained traction again, closing strongly for four consecutive days, which resulted in a month-to-date trading volume of 4.1 million shares as of December 20, 2024.
Possible drivers of bullish price movements
Several key factors likely contributed to the bullish price movements of MRS Oil in late 2024.
Notably, the release of the earnings report on October 29 was likely a catalyst, revealing a pre-tax profit of N6.2 billion—a remarkable 108.9% increase from N3 billion in 2023.
- This impressive financial performance was driven by a 141.90% growth in revenue for the quarter, consisting mainly of Premium Motor Spirit sales, which accounted for 85% of the total nine-month revenue of N248.7 billion.
Moreover, the recent successful completion of the Federal Government’s inaugural oil bid under the Petroleum Industry Act 2021 further bolstered the company’s prospects.
- MRS Oil, alongside other major players like TotalEnergies and Sifax, secured Petroleum Prospecting Licenses, outbidding NNPC.
- These licenses empower the company to explore, develop, and extract hydrocarbons from both onshore and deep offshore oil blocks, likely contributing to the surge in its stock price during the latter part of Q4.
MRS Oil recently slashed the pump price of petrol to N935 in its outlets in Lagos, as against the N1,000 sold in early December.
