Background
Mobil Oil Nigeria Plc is a subsidiary of Exxon Mobil. The Company operates in the integrated oil and gas industry. Mobil Oil Nigeria is engaged in the production and marketing of petrochemicals (gasoline, motor oils, lubricants, marine and jet fuels, etc.), packaging films and other chemical products.
The company has 360.60 million shares outstanding with shareholders fund of N9.53 billion as at December 31, 2013.
Financial Results for 2013
Mobil Nigeria Plc is the nation’s second-biggest fuel retailer by market value.
Its gross revenues for the year ended December 2013 fell by 3 percent year on year (y/y) to N78.74 billion from N80.80 billion in the same period of prior year (FY12).
Mobil’s inability to grow premium spirit sales as expected may have dampened earnings growth. Also, volatility in base oil prices in the international markets may not have supported gross margins in the review period.
Profit before tax (PBT) in the review period however surged by 26 percent y/y to N5.12 billion as against N4 billion as at FY13.
In addition, profit after tax (PAT) also spiked by 21 percent y/y to N3.48 billion compared to N2.87 billion as at FY12.
Earnings per share EPS increased by 13 percent to 965k from 856k in FY 2012.
Despite the dwindling performance in top line performance, the company was able to record an impressive operational efficiency as cost of sales margin reduced to 87 percent in FY13 from 89 percent in 2012, while cost of sales declined by 5 percent to N68.86 billion in FY13.
Consequently, gross profits were up by 21.11 percent y/y to N9.94 billion in 12M13 compared to N8.211 billion in 12M12, while gross margin climbed to 12 percent in FY13 from 10 percent as at FY12.
Net margin in the review period increased to 4.42 percent compared to 3.56 percent in 2012.
Operating expenses for the year ended December 2013 grew by 14.4 percent y/y to N8.322 billion as against N7.27 billion in 2012, while operating expense ratio increased to 10 percent in 2013 from 9 percent in 2012.
Finance costs shrank by 49 percent y/y to N151.9 million in 2013 as against N298.86 million in 2012, while long term borrowings spiked by 77 percent to N1.08 billion in 2013.
Mobil’s total assets for the year ended December 2013 expanded by 21.37 percent y/y to N40.72 billion as against N33.55 billion in 2012.
Share Performance and Outlook
The company’s share price has increased by 5.23 percent in the past year to close at N125- April 3rd 2014- on the floor of the Nigeria Stock Exchange (NSE).
Market capitalization of Mobil on the same day was N45.07 billion.
BALA AUGIE
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