At the Nigerian Stock Exchange (NSE) last week, Total Nigeria Plc released its results for the full year ended December 31, 2016. The multinational energy company revenue grew remarkably by 39.86 percent to N290.952billion, from N208.027billion it recorded in 2015.
The company reported Profit Before Tax (PBT) of N20.353billion from a low of N6.495billion in 2015, an increase of 213.35 percent; while Profit After Tax (PAT) increased to N14.797billion from N4.047billion in 2015, an increase of 265.63percent.
The company proposed dividend of N7 payable on June 12, 2017 to shareholders whose names appear in the books April 14, 2017. It had paid N10 interim dividend –which implies a total dividend of N17 against a total dividend of N14 it paid in 2015.
In their first reaction to Total Nigeria Plc full year result, Uwadiae Osadiaye-led team of analysts at FBNQuest Limited said, “Total declared a final dividend of N7 (total dividend of N17) which is rather disappointing given the strong earnings growth recorded.”
Amid record strong earnings, the analysts noted further that Total’s declared final dividend of N7 works out to a dividend payout of just 39 percent, “the lowest in over two decades”.
The Marketing and Services multinational operating in more than 130 countries has in the past 50 years remained a key player in the downstream sector of Nigerian oil and gas industry. It has an extensive distribution network of over 500 service stations nationwide and a wide range of quality energy products and services.
Listed on the Petroleum and Petroleum Products subsector of the Oil & Gas Sector, Total Nigeria Plc with a market capitalisation of N93.215billion has shares outstanding of 339,521,837 units. The company’s share price stood at N274.55kobo as at Monday March 20, 2017. The share price had reached a 52-Week High of N345 and 52-Week Low of N140.01.
In the review year 2016, the company’s shareholders fund in the review year increased by 45.11percent to N23.570billion from N16.242billion. Its Basic and Diluted Earnings Per Share (EPS) rose remarkably to N43.58 from N11.92, an increase of 265.63 percent.
Looking further into the company’s full year results, FBNQuest analysts noted that gains from Total Nigeria Plc foreign Exchange (FX) supply agreement with Total Upstream, a related company, were realised yet again.
“Given that the independent marketers struggled to source FX for imports during the period, we suspect that major marketers, especially firms with related exploration and production entities, continue to gain market share.”
The situation also provides Total with some level of pricing flexibility, especially within the corporate segment where gross margin expanded the most, FBNQuest noted.
The FBNQuest analysts said they forecasted a final dividend of N26 (consensus N19). “Year to date (Ytd), Total shares have declined -6%, broadly in line with NSE ASI. We rate the stock Underperform,” the analysts said in their first reaction to Total Nigeria Plc results.
Iheanyi Nwachukwu
