In a bid to have more liquid assets to pay off current liabilities, MRS Oil, a downstream firm in Nigeria’s oil and gas sector, has recorded 304 percent growth in cash and cash equivalents, amounting to N5.21 billion in the first quarter of 2023 from N1.29 billion in the first quarter of 2022.
The oil firm’s liquidity growth was on the back of 75 percent contributions from cash at bank and cash in hand and short-term deposits with banks contributions of 25 percent.
Further breakdown showed MRS Oil’s cash at bank and cash in hand contributed N3.89 billion to the cash and cash equivalents in the first quarter of 2023 and short-term deposits with banks contributed the sum of N1.32 billion.
“The company held cash and cash equivalents of N5.2 billion as at March 2023 from N3.2 billion as at December 2021 which represents its maximum credit exposure on these assets,” MRS Oil said in a statement.
MRS Oil stated that the credit risk on this is not significant as cash and cash equivalents reside with banks that have good credit ratings issued by reputable international rating agencies.
The oil firm’s revenue grew 72 percent to N30.79 billion in the first quarter of this year from N17.9 billion in the similar period of 2022.
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The components of the oil firm’s revenue were retail, commercial and industrial which stood at N28.68 billion, aviation contributed N1.1 billion and lubes contributed N1 billion.
The firm’s cost of sales amounted to N26.98 billion, 58.3 percent increase from N17.04 billion in the comparable period.
Administrative expenses grew to N1.46 billion in the first quarter of 2023, up 49.7 percent from N975.21 million in the first quarter of 2022.
Similarly, the firm’s selling and distribution expenses increased by 126 percent to N202.26 million from N89.54 million in the reviewed period.
MRS Oil incurred N467.68 million as income tax expense in the first quarter of 2023, a 205 percent increase from N153.57 million in the first quarter of 2022.
The firm’s operating profit amounted to N1.97 billion in the first quarter of 2023, this is coming from an operating loss of N186.82 million in the same period of 2022.
However, the oil firm’s other income dipped 68 percent to N22.81 million in the first quarter of 2023 from N71.27 million in the first quarter of 2022.
Profit after tax for the period amounted to N1.48 billion in the first quarter of 2023 from loss after tax to N41.45 million in the first quarter of 2022.
The firm’s net finance costs amounted to N22.70 million, 177 percent increase from N8.20 million in the reviewed period.
Trade and other receivables grew 7.3 percent to N19.35 billion from N18.03 billion while MRS Oil trade and other payables amounted to N18.77 billion, up 16.8 percent from N16.07 billion.
MRS Oil’s net cash generated from operating activities stood at a positive N3.92 billion from a negative of N1.3 billion in the comparable period.
The firm’s net cash used for investing activities stood at a negative year on year to N3.61 billion from N144.04 million in the reviewed period.
Net cash used in financing activities stood at a positive of N1.76 billion from a negative of N24.7 million in the comparable periods.
Basic earnings per share amounted to N4.30 per share from N0.14 per share in the period reviewed.
