• Monday, April 22, 2024
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Four takeaways from MRS Oil’s full-year financial performance

Four takeaways from MRS Oil’s full-year financial performance

Despite Nigeria’s tough business environment, MRS Oil Nigeria Plc, a major player in the downstream oil and gas sector, recorded an improvement in its financial performance last year.

In its latest financial statement, the company said it recorded a 272 percent increase in its after-tax profit to N4.89 billion, up from N1.32 billion in 2022.

The company’s resilience was evident in its share price performance, with a 644.68 percent year-to-date gain, making it the top-performing stock in the oil and gas sector of the Nigerian Exchange Limited.

Here are key highlights from the company’s financial results.

Cash from operating activities showed resilience

In the first quarter of 2023, MRS Oil demonstrated resilience in its cash from operating activities, reflecting the core business activity’s strength.

The company achieved a positive outcome in cash generated from operating activities during this period. Compared to the loss of N1.30 billion in Q1 2022, there was a substantial increase of N3.92 billion.

This outcome can be attributed to two primary factors such as the receipt of advances from customers and an uptick in trade and other payables. MRS Oil’s trade and other payables rose by 16.8 percent to N18.77 billion, up from N16.07 billion.

Furthermore, its after-tax profit for Q1 last year amounted to N1.48 billion, showcasing a significant improvement from an after-tax loss of N41.45 million in the same period of 2022.

Profit jumps amid huge FX loss

Following President Bola Tinubu’s announcement of petrol subsidy removal during his inauguration on May 29, pump prices skyrocketed to N600, while the value of the naira plummeted due to the currency floating.

In response to these market dynamics, MRS Oil’s profit surged by 558 percent in Q2, reaching N2.31 billion from N0.351 billion in 2022.

Cash liquidity grew by 145%

Cash equivalents represent investment securities designed for short-term investment purposes, known for their high credit quality and liquidity.

In Q3, MRS Oil bolstered its cash and cash equivalents, amounting to N8.38 billion compared to N3.42 billion in 2022.

Cash generated from operating activities for the first nine months of 2023 surged to N10.70 billion from N0.997 billion in 2022.

However, cash from investing activities experienced a negative trend, reaching N5.47 billion, compared to a negative of N0.997 billion in 2022.

Moreover, revenue for the first nine months of 2023 soared to N100.88 billion, marking a substantial increase from N69.15 billion recorded in the corresponding period in 2022.

Revenue fell short of projection

According to the company’s projection for Q4, it aimed to attain a revenue of N154 billion, expecting a gross profit of N7.07 billion and aggregate expenditures of N5.32 billion, leading to a projected profit before tax of N1.5 billion.

However, despite the fourth-quarter revenue of 2023 reaching a record high of N81.43 billion, it fell short of the forecast by 41 percent.

Similarly, the pre-tax profit for Q4, amounting to N637 million, also missed the forecast by 57 percent, and its after-tax profit amounted to N1.46 billion, a marginal increase from N1.32 billion recorded in 2022.