MRS Oil Nigeria has announced its unaudited financial statement for 2019, which shows that the downstream firm recorded a loss after tax of N1.1 billion during the period. The loss was caused by a 28 percent fall in the company’s revenue last year, majority of which was suffered in the same of the premium motor spirit popularly called PMS.
For the entire 2019, MRS Oil Nigeria realised N64.75 billion as total revenue compared with N89.55 billion the firm made in 2018.
Along product segment, revenue from the sale of PMS accounted for 72 percent in 2019, similar to 69 percent weight in 2018.
PMS revenue in 2019 which amounted to N46.61 billion represented a 25 percent decline compared with N62.09 billion in 2018. The sale of aviation turbine kerosene (ATK) recorded 25 percent increased as it hit N80.9 billion in 2019 as against N6.49 billion in 2018. Revenue from automotive gasoline oil (AGO), popularly called diesel declined by 38 percent to N5.87 billion in 2019 compared with N9.41 billion in corresponding period in 2018. Sales of dual purpose Kerosene (DPK) also declined by 99 percent to N84.8 million down from N8.03 billion in 2018.
Between October 2018 and October 2019, the Nigerian National Petroleum Corporation (NNPC) imported 22.7 billion litres of PMS and 396.86 million litres of AGO and DPK, data sourced from NNPC’s Financial and Operations Report, October 2019, has revealed.
On the contrary, revenue from liquefied natural gas (LPG) rose by 288 percent during the review period, an indication of the rising acceptance of LPG as a better means of cooking among Nigerians.
Industry watchers have attributed the declining revenue of downstream oil companies to the sudden restriction the Nigerian government placed on the sales of white products to the effect that retail petroleum outlets within 20km of the Nigerian borders should not be allowed to sell fuel.
“The border closure really impacted downstream oil and gas firms in Nigeria. The policy came all of a sudden and retail outlet is not something a firm can relocate or site within a jiffy. Notwithstanding, MRS Nigeria has to diversify its revenue sources because based on the current structure, reliance is placed on PMS sales. LPG is gaining wider acceptance, and as such investing more in LPG value chain should help the company in the medium to long term”, an industry analyst who did not want his name in print, said.
Further analysis shows that the cost of sales is still very high in Nigeria and this directly compounds the profitability drives of downstream firms. In 2019, MRS Oil Nigeria expended N61.19 billion as cost of sales which means that the firm spent N94 to generate N100 revenue which was almost the same as N95 the company spent in 2018 to generate N100.
The stock is presently worth N15.30 per share.
In January, MRS Oil Nigeria announced the appointment of Charles Owiti Agutu as the new chief finance officer (CFO) following the resignation of Kamil Bello.
Charles Agutu holds a Bachelor of Commerce degree (Accounting Option) from the University of Nairobi, Kenya. He is also a Certified Public Accountant of Kenya. He has over three (3) decades experience in accounting and finance in high level positions in reputable organizations, including as the group finance director at Wilken Group,East Africa, finance manager at Celtel Kenya Limited, financial analysis & accounting manager at Mobil Oil Kenya Limited, amongst others.
Until his appointment as the Chief Finance Officer (CFO), he was the Group Head of Finance and Accounts of MRS Holdings Limited. Charles O. Agutu’s appointment was effective January 31, 2020.