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Seven takeaways from TotalEnergies nine-month 2021 results

Seven takeaways from Total Energies nine-month 2021 results

TotalEnergies Marketing Nigeria (TMN) Plc has recorded the strongest net profit expansion among the largest firms quoted on the NGX as the reopening of the economy strengthened product demand.

TotalEnergies has ridden out of the pandemic crisis that undermined earnings after posting its first loss in 2020 due to the economic effect of the COVID-19 pandemic.

Analysts had envisaged that the downstream oil and gas giant’s earnings would return to pre-pandemic levels as average oil price increased by $28.8 to $67.4 in the first nine months of 2021 compared to $38.6 in the same period in 2020.

Here are seven major takeaways from TotalEnergies latest 2021 financial report

2,577 percent surge in profit

Total energies recorded a surge in their 2021 nine months profit by 2,577 percent to N13.4 billion, the highest in ten years, compared to the N500.1 million recorded in the corresponding period last year.

Increase in Revenue

The firm’s revenue also increased by 60 percent to N242.2 billion in the first nine months of 2021 compared to N151.7 billion last year. This was anchored on the 71.5 percent increase in the sale of lubricants and others to N61.6 billion in the first nine months of 2021 from N35.9 billion in the same period last year.

There was a 54 percent increase in the sale of petroleum products to N180.7 billion compared to N117.4 billion recorded in the same period last year.

Increase in other income

The downstream company also recorded an increase in other income by 217 percent to 3.6 billion nine months this year from 1.2 billion recorded in the same period last year. This was anchored on the Net foreign exchange gain of 1.9 billion recorded this year compared to last year where nothing was recorded in that regard.

Earnings per share

Their earnings per share jumped 2582 percent to N39.43 from N1.47 recorded in the same period last year.

Lower borrowing cost

Finance cost declined by 50 percent to N1.3 billion in 9M’20 compared to N2.6 billion in the first nine months of the previous year, similarly, finance income declined by 84 percent to N346 million from N2.2 billion a year ago.

Read also: TotalEnergies eyes logistics contract award in Nigerian assets

Share Price

Total Energies’ shares closed flat at N221.9 per unit on Tuesday, 28th December 2021. The stock has returned 70.69 percent from the beginning of the year to date (December 28).

Growth in assets

The company’s total assets grew by 37.7 percent to N197.8 billion from N143.6 billion last year

Increased sales cost

The cost of sales was down 54.3 percent to N201.6 billion in the first nine months compared to N130.7 billion in the same period last year.

Cash generated from operating activities

Cash flow from operating activities (CFO) indicates the amount of money a company brings in from its ongoing, regular business activities. Cash generated from operating activities surged 60 percent to N31 billion in 9M’20 compared to N19.4 billion in the same period last year.

Net Profit Margin

Net profit margin shows the amount of net profit a company obtains per naira of revenue gained. Total energies made a profit margin of 5.5 percent. This was obtained by dividing the company’s profit by its revenue.

Overview

However, sector players are operating in a tough and unpredictable macroeconomic environment.

First, the Nigerian National Petroleum Corporation remains the sole importer of petroleum products as sector players are hamstrung by foreign exchange illiquidity.

Second, the non-reflective market conditions are stifling investment flows into the industry, and foreign investors are on the sidelines. A combination of these challenges means companies will continue to operate on slim margins.