11 plc, formerly Mobil Nigeria plc, posted a 35 percent decline in profit to N4.12 billion in the first nine months of 2020 from N6.3 billion a year earlier as revenue plunged.
The oil firm’s revenue slumped 19 percent from N144 billion in 2019 to N114 billion, the lowest for the nine-month period in almost three years.
11 plc’s share price remained flat at N190 at the end of trading, Wednesday. The stock is however up 29 percent since the start of the year.
Although cost of sales was down 17.9 percent to N106.7 billion compared to N130 billion a year ago, it could not offset the decline in gross profit.
Consequently, 11 plc’s gross profit fell 30 percent to N7.9 billion in 9M’20 compared to N11.4 billion a year earlier.
“Although government relaxed lockdown measures in Q2, activities are still yet to return to pre-pandemic levels”, said Gbolahan Ologunro, a research analyst at Lagos-based Cordros.
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Ologunro further explained that the fear of contracting the virus has slowed down interstate movement and that has reduced the consumption of Premium Motor Spirits (PMS), affecting downstream oil firms like 11 plc.
The company has also started that their business has slowed as a result of the pandemic
“The covid-19 crisis continues to impact all businesses, with the effect expected to be more pronounced in the future,” 11 plc said.
“Our priority is to protect the health, safety and welfare of all stakeholder under our duty of care as well as support the government and its agencies as they work to reduce the impact of the outbreak.”
Proceeds from the sale of fuels fell 23 percent to N86.7 billion from N114 billion in the reference periods.
Revenue from lubricants and liquified petroleum gas (LPG) rose 0.37 percent and 39 percent respectively compared to last year.
Profit before tax dipped 35 percent to N6.1 billion in the nine months period compared to N9.4 billion in the same period last year.
Borrowing cost rose 59 percent to N414.8 million compared to 261 million in the first nine months of the previous year.
Finance income increased by 55 percent to 199 million from N128 million a year ago.
Earnings per share fell 35 percent to N1143 from N1759 in the same period last year.
Income tax expense fell 33 percent to N3.0 billion in 9M’20 from N2.0 billion in 2019.
The firm’s selling and distribution expenses declined 5 percent to N4.59 billion while administrative expenses rose 6 percent to N3.3 billion from N3.1 billion the previous year.
11 plc’s operating profit also dropped by 33 percent to N6.3 billion from N 9.5 billion a year ago.
For the three months period (June to September), revenue plunged 29.7 percent to N34.2 billion compared to N48.7 recorded in the previous year.
Cost of sales also declined to N31 billion in Q3’20 from N44 billion in the same period last year.
“At this stage, it is not possible to determine the financial impact of Covid-19 on our company given the lack of visibility on the end date of the pandemic or on how long it would continue the impact the Nigerian economy”
“The company has a strong balance sheet and the board of management are focusing on efforts to mitigate the impact on businesses”, the company said.
