Background
Total Nigeria Plc, formerly known as Total Fina Elf Nigeria Plc, is the entity which emerged following the successful merger between Total Nigeria Plc and Elf Oil Nigeria Ltd on 11th September, 2001.
Total Nigeria Plc with RC 1396 was incorporated as a private company on 1st June, 1956 to market petroleum products in Nigeria. It became Total Nigeria Ltd in 1967, and Total Nigeria Plc in 1978 after it went public in accordance with the Nigerian Enterprises Promotion Decree ( 1977) with N10 million.
The company has 339.52 million shares outstanding with shareholders fund of N14.31 billion as at March 2014.
Financial performance for March 2014
Total Nigeria Plc, a downstream oil and gas company released its first quarter 2014 financial results which showed weak performance at both top and bottom line level.
The sector has been affected by the delay in payment of subsidy claims as the Federal Government works to weed out corruption in the system.
For the first quarter of 2014, Total’s revenue slid slightly by 1 percent year on year to N60.59 billion from N61.05 billion in the same period in the prior year.
The company was unable to boost bottom line performance as Profit before tax (PBT) shrank by 8 percent to N1.71 billion compared with N1.85 billion as at Q1 2013.
Profit after tax also followed the same trend as it declined by 6.5 percent in the review period to N1.07 billion as against N1.14 billion as at Q1’2013.
This means that the company has not been efficiently managing investments and assets which shareholders have entrusted in their custody to generate reasonable level of profit. The profit margin decreased to 1.76 percent from 1.87 percent.
Earnings per share EPS fell to 315k in Q1’2014 from 337 k as at Q1’2013.
Gross profits were down 8.03 percent to N7.10 billion in Q1’14 as against N7.74 billion as at Q1’2013 indicating poor management of direct cost attributable to operations.
The gross profit margin shows the relationship between turnover and cost of sales and is a proof of the ability of the company to control cost of inventories and to pass along any price increase through sales to clients.
There was a decrease in the gross profit margin, which was 11.71 percent against 12.64 in Q1 2013 .This signifies that the company’s ability to translate turnover into profits slowed.
Cost of sales margin moved to 88 percent in Q1’14 from 87.01 percent as at Q1 2013
A 7.55 percent decrease in operating expenses to N5.01 billion in the review period and a flat operating expenses margin at 8.27 couldn’t stop operating profit from falling by 5.28 percent to N2.29 billion in 2014.
Fixed asset turnover in the review period decreased to 0.71 times as against 0.76 times as at Q1’2013. This shows that the ability of the company to use assets in generating profits has reduced.
Total assets for the first three months through March 2013 rose by 6.97 percent to N84.94 billion in Q1’2014 compared with N79.94 billion as at Q1’2013.
Share performance and outlook
Total’s share price has increased by 0.2 percent in the past year to close at N154 per share on May 14th2014 on the floor of the Nigeria Stock Exchange.
Market capitalization was N52.39 billion on the same day.
The company currently trades at Price to book ratio and price to sales ratio of 4.6 xs and 0.21 xs.
BALA AUGIE
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
