TotalEnergies Marketing Nigeria Plc (TOTAL) has published its Q4-22 unaudited financials reporting EPS growth of 13.0% y/y to NGN11.57 in Q4-22 (Q4-21: NGN10.24), supported by improved revenue (+46.6% y/y) and lower operating expenses (-10.1% y/y). Meanwhile, 2022FY EPS declined by 2.5% y/y to NGN48.40 (2021FY: NGN49.66), owing to a sharp increase in net finance costs (+211.7% y/y).
Revenue grew by 46.6% y/y in Q4-22 (2022FY: +41.4% y/y), primarily driven by solid growth across the business’ three segments – Network (+17.2% y/y | 42.4% of revenue), General Trade (+63.7% y/y | 41.3% of revenue) and Aviation (+139.3% y/y | 14.6% of revenue). We attribute the growth in revenue to the higher fuel prices – PMS: +21.0% y/y; AGO: +194.4% y/y; and DPK: +142.4% y/y – in the period. Thus, the sales of petroleum products (+57.6% y/y | 80.6% of revenue) constituted the bulk of revenue, while lubricants and others (+14.4% y/y constituted the remaining 19.4% of revenue.
On a q/q basis, revenue rose by 60.0%, following a broad base increase across the Network (+8.9% y/y), General Trade (+13.5% y/y), and Aviation (+26.4% y/y) business segments.
Gross margin contracted by 386bps to 10.7% in Q4-22 (Q4-21: 14.5%) as the rally in crude oil prices (Average Brent price: USD89.13/bbl in Q4-22 vs USD78.47/bbl in Q4-21) led to faster growth in the cost of sales (+53.2% y/y) relative to revenue (+46.6% y/y). Consequently, EBITDA (-65bps) and EBIT (-10bps) margins printed lower at 6.4% and 5.1% (Q4-21: 7.1% and 5.2%), respectively, despite a 10.1% y/y decline in operating expenses.
Net finance cost rose sharply to NGN1.36 billion in the quarter (Q4-21: NGN10.48 million), following a 339.8% y/y rise in finance cost. Notably, the higher finance cost outturn reflects the surge in interest on import loans (+3208.7% y/y) and on other loans (+67.8% y/y).
Overall, TOTAL’s PBT grew by 17.4% y/y to NGN6.00 billion in Q4-22 (Q4-21: NGN5.11 billion). Following a tax expense of NGN2.07 billion, profit after tax printed NGN3.93 billion (Q4-21: NGN3.48 billion).
According to Cordros Capital analysts, “TOTAL’s performance was in line with our expectations, with the marketer’s performance showing resilience, despite the product supply shortages experienced in the quarter. Notwithstanding, we are concerned about the significant growth in net finance costs, which undermined the full-year performance. We await the release of the audited results for a dividend declaration.”
