Nigeria’s downstream sector witnessed a major setback in the first quarter of 2022 following a major disruption in the supply and distribution chain of Premium Motor Spirit (PMS).
This development raised tension across major cities in Africa’s biggest oil-producing country on account of high methanol in the petrol distributed in the country. The process of recalling the tainted batch led to fuel scarcity and the consequent hike in prices and distrust from the public.
Apart from Ardova Plc, Nigeria’s biggest downstream firms raked in N5.76 billion as a combined profit in the first three months of 2022 compared to N3.65 billion in the first three months of 2021.
The performance of the downstream sectors was influenced by its revenue which collectively stood at N168.48 billion in March 2022 compared to N131.53 billion in March 2021.
Total Energies
Total Energies increased its profit to N4.36 billion in March 2022 as against N3 billion in March 2021.
Total Energies was able to increase its revenue by 46 percent to N97.6 billion in the first three months of 2022 from N66.7 billion in the first three months of 2021.
The firm earned a total revenue of N67.9billion from petroleum products compared to N50.6 billion in Q1 2020 while revenue from lubricants and others amounted to N30.6 billion in the first three months of 2022, compared to N16.billion in 2021.
Further breakdown showed revenue from petroleum sales to service stations account for 53percent of the firm’s total revenue, revenue from the sale of petroleum products to corporate customers excluding the aviation industry accounts for 36 percent of total revenue while revenue from the sale of petroleum products to customers in the aviation industry accounts for the remaining 11 percent of total revenue.
The oil company’s cost of sales jumped to N83.1 billion, more than N55.20 billion in the previous year.
Selling & distribution cost surged to N1.161 billion, compared to N864.4 million in the period under review.
The firm’s administrative expenses saw a rise to N7.56 billion, coming from N7 billion in the preceding year.
Finance income rose to N684 million in the first quarter of 2022 from N37.05 million in the first quarter of 2021.
Total assets grew to N271 billion as against N208.7 billion in the preceding year.
Income taxation rose to reach N2.18 billion, coming from N1.38 billion in the previous year. Inventories stood at N35.08 billion in March 2022, coming from N29.2 billion in March 2021.
Conoil plc
Conoil Plc, a marketer of refined petroleum products in Nigeria, recorded a 31 percent increase in its profit after tax to N557.2 million in the first quarter (Q1) of 2022 from N423.9 million in the same period of last year.
The oil company’s revenue, however, declined by 21 percent to N26.1 billion from N33 billion in the year under review, while the cost of sales decreased by 24 percent to N23.3 billion from N30.7 billion.
Selling and distribution expenses rose to N519,498 million in March 2022 from N436,286 million in March 2021. Administrative expenses grew to N1.31 billion against N1.29 billion in the comparable periods.
Its total assets decreased to N55.3 billion in the first quarter of 2022 from N54 billion the same period in the previous year.
Tax payable by the company decreased to N2.22 billion from N2.24 billion in the preceding year. Inventories grew to N10.3 billion from N8.9 billion.
Borrowings amounted to N8.8 billion in Q1 2022 from N3.9 billion in Q1 2021.
MRS
MRS, one of the companies Nigerian National Petroleum Company (NNPC) Limited alleged was responsible for the dirty petrol saga, recorded a loss of N41.45 million compared to N4.8 million profit in the first quarter of the previous year.
Revenue grew by just 3 percent to N17.9 billion in Q1 2022 from N17.3 billion in the comparable periods.
The cost of sales jumped to N16.76 billion compared to N16.43 billion in the period under review.
Selling and distribution expenses increased to N336 million from N329 million in the previous year. Administrative expenses also increased to N980.8 million compared to N969.9 million in the period under review.
Finance income rose to N42 million in Q1 2022 compared to N9.5 million in Q1 2021. Total Assets dropped to N35.97 billion in March 2022 compared to N37.05 billion in the previous year.
Tax payable increased to N419.7 million in March 2022 from N305.8 million in the previous year.
The firm’s Inventories stood at N4.03 billion in the first quarter of 2022 from N2.9 billion in the same period in 2021. The oil company’s short-term borrowings totaled N1.415 billion in Q1 2022 from N1.411 billion in the previous year.
On Feb 10, the NNPC Limited named four companies responsible for importing bad petrol into the country which has led to an acute shortage of the product across the country.
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Eterna plc
Eterna in its latest financial books recorded a profit of N877 million in the first quarter of 2022 as against N254 million profit in the first quarter of 2021.
Revenue surged to N26.82 billion in March 2022 compared to N14.39 billion in March 2021. The cost of sales increased to N24.5 billion in Q1 2022 compared to N13 billion in Q1 in the previous year.
Selling and distribution expenses declined to N33 million compared to N37 million in the comparable periods.
General and administrative expenses rose to N1.1 billion from N795 million in the previous year. Finance income recorded in the financials amounted to N22 million in March 2022. Total assets rose to N49.11 billion as against N30.98 billion in the comparable period.
Tax payable by the company increased to N381 million in Q1 2022 from N268.6 million in Q1 2021. Inventories increased to N9.2 billion in the first quarter of 2022 compared to N5.8 billion in the first quarter of 2021.
Borrowings by the company amounted to N18.29 billion in March 2022 from N11.77 billion in March 2021.
What experts say
Luqman Agboola, head of energy and infrastructure at Sofidam Capital
One major component of downstream’s 2022 revenue reveals revenue from the sales of lubricants was the major driver of growth despite challenges with dirty petrol. This is on the back of significant increases recorded in the price of lubricants across the country.
Johnson Chukwu, managing director of Crowry assets management limited
One of the reasons why they are doing well is because many of them have been able to diversify their means of revenue, produce intermediate products and provide products that are complementary.
