Seplat, Eterna, others shine amid oil price rally
Nigerian oil and gas stocks have gained 61.72 percent year-to-date (YTD), making them the best-performing stocks compared to other sectors, according to data compiled by BusinessDay.
Their performance is mainly down to higher oil prices, with Brent crude, the benchmark against which Nigeria’s oil is priced, rising 43 percent since the beginning of the year.
Seplat recorded the highest YTD return of 100.02 percent compared to its peers. Its share price stood at N1300.1 on Monday, up from N650 at the beginning of the trading year.
Eterna ranked second with a 43.56 YTD return, hitting N7.25 on 16 May from N5.05 on the first trading day.
Conoil ranked third with 43.18 YTD change to N31.5 on Monday from N22 on the first trading day.
TotalEnergies ranked fourth with 5.68 percent YTD to N234.5 from N221.9 in the period under review.
Following oil and gas, the industrial goods stocks gained 14.2 percent while the consumer goods sector and banking sector gained 17.77 percent and 7.15 percent respectively in the period under review.
Ayodele Oni, a partner, energy practice group at Bloomfield LP, said that rising oil and gas prices are key drivers for the improved investor sentiment towards oil and gas stocks.
A breakdown of the top oil firms in Nigeria showed Seplat’s revenue grew to N100.6 billion in the first quarter of this year, the highest revenue compared to its peers. Total Energies earned N97.6 billion, and Eterna (N26.8 billion), Conoil (N26.2 billion), and MRS (N17.9 billion).
Oni said the performance of the oil and gas firms is sustainable in the short and medium-term.
“I think it is sustainable in the short term, and medium-term but in the long term, no, because of decarbonisation and net zero, unless they diversify into energy and gas which many of them are already doing,” Oni said.
Seplat grew its revenue by 74 percent to N100.6 billion in the first three months of 2022, although its profit declined by 12 percent to N8.3 billion from N9.45 billion in the comparable period.
TotalEnergies saw a 46 percent increase in revenue to N97.6 billion in Q1 2022 from N66.7 billion in Q1 2021. The oil firm increased its profit to N4.36 billion from N3 billion.
Eterna’s revenue grew 86 percent to N26.82 billion in Q1 2022 from N14.39 billion in the same period of 2021. It recorded a 245 percent increase in profit to N877 million from N254 million.
Conoil, a marketer of refined petroleum products in Nigeria, also saw its profit jump by 31 percent to N557.2 million in Q1 2022 from N423.9 million in the same period a year earlier, although its revenue dropped 21 percent to N26.1 billion from N33 billion.