Shares of MRS Oil Nigeria plc remained unchanged after the downstream oil firm projected a profit after tax of N775 million in the last quarter of 2020, a 234 percent jump from the N575 million loss earned in Q4 2019.
MRS’ share price remained unchanged at N12.45 on Wednesday, where it has been for over a month now.
MRS distributes and markets refined petroleum products and fuels and also blends lubricants and manufactures greases.
The company reported its first profit in Q2 2020 of N725 million after reporting a loss since 2018. Nonetheless, a loss of N329.71 million was recorded for the first half of 2020 as the company made a loss of N1.06 billion in Q1 2020.
The projected profit in Q4 is expected to ride on the back of revenue as it is expected to improve to N125 billion, reflecting 611 percent increase from the actual Q4 2019 figure of N17.6 billion.
For the first half of 2020, the total revenue generated by five of Nigeria’s main oil marketers listed on the Nigerian Stock Exchange (NSE) took a downward turn by 40.79 percent.
MRS oil is however, the only oil marketer that has released its projection for Q4 2020.
This decline was as a result of the imposed lockdown in the most part of the second quarter, at state and federal level as well as the reduction in petrol pump price to N125 from N145 in that period.
Agusto & Co, an indigenous African credit rating agency has projected that revenue of oil marketers will fall by about N4.3 trillion in 2020 due to the economic impact of the coronavirus pandemic on fuel consumption.
Given the three straight months increase in petrol prices which is currently at N162, the official exchange rate of N380/$1 will test the sustainability of Nigeria’s petroleum pricing.
Also, if the significant reduction in petrol consumption as a result of the coronavirus pandemic persists, making adequate revenue will be hindered.
“Government dominance in the petroleum industry, particularly in relation to the importation of refined petroleum products as well as regulation of pump prices and the lack of substantial investment serves as hindrances to the growth of Nigeria’s oil and gas sector”, according to the 2020 Oil and Gas Downstream Report by Agusto & Co.