MRS Oil, a downstream oil and gas firm in Nigeria, began the year with a share price of N105.00 and traded at a share price of N132.00 as of November 22, 2024.
According to Investing.com, a real-time financial platform, between July and September 2024, MRS appreciated from N132.65 as of July 1 to N132.70 as of September 30. During the period, investors’ appetite for the company’s shares grew marginally on demand.
The firm has now reached a market capitalisation of N45.2 billion, making it one of the most capitalised oil and gas stocks in the NGX.
The downstream oil and gas firm has a dividend yield of 2.36 percent and a price-to-earnings multiple of 1.6 times making the stock attractive.
This year, earnings are expected to get a boost from the possible removal of subsidy on petroleum products as sector players are reeling from inflationary pressures, foreign exchange liquidity constraints, and inadequate infrastructure.
However, the company’s financial statement for the nine months of the year revealed that the firm’s after-tax profit rose to N6.2 billion, the highest in at least thirteen years, compared to N3.4 billion in the same period of last year.
Increase in Revenue
The firm’s revenue also increased by 146.7 percent to N248.7 billion in the nine months of 2024 compared to N100.8 billion in the same period last year. This was anchored on the 54.02 percent increase in the sale of Premium Motor Spirit (PMS) to N88.1 billion from N57.2 billion.
There was a 172 percent increase in the sale of Automotive Gas Oil (AGO) to N7.78 billion compared to N2.86 billion.
Increase in finance cost and finance income
The Central Bank of Nigeria has raised its monetary policy for five consecutive times this year by 850 points to 26.25 percent in September from 26.75 percent.
This has impacted the company’s finance income to rise from N89.4 million to N210 million, driven by interest income on short-term bank deposits while its interest expense fell to N1.9 million from N24 million, bringing its total finance cost to N99.7 million.
Increase in other income
The downstream company also recorded an increase in other income by 364.4 percent to N622 million nine months this year from N134.9 million recorded in the same period last year. This was anchored on the Income on storage services of N452 million from N39 million.
Increased sales cost
The cost of sales was down 183 percent to N229 billion in the nine months compared to N80.9 billion in the same period last year, the rise in its cost of sales was driven by the company’s petroleum products to N199 billion from N75 billion.
Cash generated from operating activities
Cash flow from operating activities (CFO) indicates the amount of money a company brings in from its ongoing, regular business activities. Cash generated from operating activities surged 8.4 percent to N11.5 billion in 9M ’24 compared to N10.6 billion in the same period last year.
