According to information from its financial statement, Total Energies and Marketing Nigeria Plc’s profit decreased by almost 20% as the benefits of strong revenue growth were undermined by increased finance expenses.
The firm had revenue of N635.95 billion in 2023, up around 32% year over year from N482.47 billion in the same time in 2022. The increase in income from sources like the sale of petroleum products, which brought in N509.31 billion, and the sale of lubricants and other items, which brought in N126.64 billion, was the main driver of this.
Costs surged by 31% to N554.13 billion, offsetting the overall turnover. Impairment loss on financial assets came to N358.57 million. Conversely, net income decreased by 19.8% in 2023 to N12.93 billion from N16.12 billion in the prior year. This fall in profit was traced to high financing costs which rose 87.6% to N10.11 billion.
It reported a 41.6% decline in standalone earnings per share (EPS) to N6.22 in Q4-2023 versus N10.64 in Q4-2022 undermined mainly by a 139.6% uptick in net finance cost and FX losses.
FX losses printed at N11.50 billion as against FX gains of N71.88 million in Q4-22. As a result, the 2023 EPS settled lower at N38.09 from N47.47 in 2022. Net finance cost surged by 101.1% to N6.31 billion in 2023 due to a 87.5% increase in finance cost.
Higher borrowing cost was primarily facilitated by the higher balance in interest on other loans and interest on bank overdrafts. Meanwhile, finance income grew by 68.7%, supported by higher interest on deposits.
Overall, profit before tax declined by 28.2% to N17.61 billion in 2023. Following a tax expense of N4.68 billion, profit after tax printed N12.93 billion, which is 19.8% lower than N16.12 billion recorded in 2022.
According to analysts, the company’s performance mirrors the numerous challenges prevalent in the downstream oil and gas sector, with the primary issues being the FX losses and escalating finance costs that partly dragged the company’s earnings.
