These are not the best of times for Total Nigeria Plc, one of the major players in the downstream sector of Nigeria’s oil & gas industry, as an upsurge in administrative expenses, as well as finance costs, have pulled the oil firm back into losses.
Despite a marginal increase in sales between in the third quarter of 2019, the company posted an aftertax loss of N281.86 million in the period compared with N1.99 billion profit recorded in the comparative period a year earlier.
This followed an unprecedented quarterly loss of N474 million in the first quarter of this year, and N734 million profit recorded in the second quarter of 2019.
Consequently, Total Nigeria recorded a cumulative loss of N204 million for the first nine months of the year as against a net profit of N7.66 billion realised in the same period last year, according to its nine-month 2019 financial results filed Wednesday on the Nigerian Stock Exchange (NSE).
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A breakdown of the figures shows the losses were largely driven by administrative expenses which grew by almost a quarter January and September this year to N17.5 billion coupled with finance costs which rose by more than double to N6.14 billion.
The increase in administrative expenses was triggered by a fresh N2.06 billion incurred as technical assistance and management fees in the third quarter of 2019, while the company’s continuous dependence on bank overdrafts heightened its finance costs.
Furthermore, as a result of the increased operating activities, earnings before interest and taxes (EBIT) margin, a measure of a firm’s profitability calculated without taking into account the effect of interest and taxes, slumped by 3.6 percent on a year-on-year basis to 2.6 percent in the nine-month period.
Total Nigeria witnessed a marginal drop in sales in the fuel segment, while the lubricant arm of the business survived a 4 percent growth in the third quarter from the same period last year.
Shares of Total remained flat at N123.2 per share at the close of trade on Wednesday, bring year’s return to negative 39.31 percent as bearish sentiments in the broad market weigh on stocks.
Information from Bloomberg however shows that the company’s stock has a dividend yield of 13.8 percent and earnings per share (EPS) of N7.5.
Total Nigeria Plc distributes and markets refined petroleum products and fuels. The company further sells LPG and operates lubricant blending plants in Nigeria.
