MRS, an oil marketing company, in Nigeria’s downstream sector, has recorded a 916 percent surge in cash from operating activities in the first nine months of 2023.
According to the company’s latest financial statements, the firm’s cash from operating activities rose to N10.9 billion in the first nine months from N1.07 billion in the same period of 2022.
This shows its ability to generate enough cash to cover its short-term obligations.
A breakdown of the firm’s financial statements showed its revenue increased to N100.9 billion from N69.2 billion recorded in the similar period of 2022. Revenue obtained from PMS’s sales rose to N86.2 billion from N69.2 billion.
The firm’s increase in petrol sales can be attributed to the rise in petrol prices after President Bola Tinubu announced the removal of the petrol subsidy in May.
Read also: MRS generates more cash from operations than peers
According to data from the National Bureau of Statistics, the average retail price of petrol grew by 226.2 percent to N626.2 per litre in September this year from N191.6 litre in the same period of 2022.
MRS’s profit after tax increased by 338 percent to N3.44 billion from N785 million in the same period of 2022. The firm’s other income also increased by 26 percent to N134.9 million.
However, operating expenses rose to N6.39 billion from N3.94 billion, driven by administrative expenses which amounted to N6.07 billion. Net finance cost amounted to N5.47 million contrasting with the gain of N62.9 million.
Read also: MRS Oil grows liquid assets by 304% to N5.21bn
Earnings per share increased to N10.04 from N2.29 in the corresponding period of 2022. Net cash used for investing activities stood at a negative of N5.47 billion, from a negative N377.4 million which indicates that the company has spent more cash on its investing activities than it received from them.
Similarly, net cash used in financing activities stood at a negative N64.5 million, contrasting with a positive of N52,000 which indicates that the downstream firm has used more cash to finance its activities than it has generated from financing activities.
The firms’ oil cash and cash equivalents increased to N8.38 billion, an increase from N3.42 million.
