H1 2021: Total Nigeria reports N8.07bn profit, declares interim dividend of N4.00
By Kayode Tokede
Total Nigeria Plc in its unaudited financial statement for half year (H1) ended June 30, 2021 reported N8.07billion from a loss of N537.2million reported in prior unaudited result and accounts.
Profit before tax also closed H1 2021 at N11.78billion from a loss of N523.9million in H1 2020.
About 42 per cent increase in revenue to N151.33billion in H1 2021 from N106.1billion in H1 2019 contributed to the petroleum marketing profitability.
Analysts at Cordros research stated that, “Revenue for the period returned to the pre-pandemic level, as it grew by 132.1 per cent y/y in Q2-21.
“The impressive revenue performance was driven by the solid growth across the business’ three segments – Network (+43.1 per cent y/y; 71 per cent of revenue), General Trade (+305.0 per cent y/y; 24.0 per cent of revenue) and Aviation (+893.2 per cent y/y; 5.0 of revenue).
“We attribute the increase across the business lines to (1) an increase in demand given that the economy has effectively reopened and (2) TOTAL’s ability to substantially push out volumes given its vast storage and distribution channels.
“Across the product lines, Petroleum products and Lubricants and others lines grew by 138.5 per cent y/y and 114.9 per cent y/y, respectively. Petroleum products contribution to total revenue increased to 74.9 per cent (Q2-20: 72.8 per cent) while Lubricants and others decreased to 25.1% (Q2-20: 27.2 per cent).
“On a q/q basis, revenue increased by 26.9 per cent, with all business segments – General Trade (+121.4 per cent) and Aviation (+178.2 per cent) – save for the Network segment (-18.5 per cent), recording sturdy growth.”
Also, effective management of finance cost to N842million in H1 2021 from N1.95billion reported in H1 2020 contributed to profits growth in the period under review.
However, the Board of Directors of Total Nigeria in a recent meeting held on the 19th of July 2021, has declared an interim dividend of N4.00 per ordinary share of 50 kobo for the period ended June 30, 2021.
The declared dividend translates into N1.36billion interim dividend payout to shareholders.
According to a notice signed by the company’s secretary, Bunmi Popoola-Mordi and filed with the Nigerian Exchange Group Limited (NGX), the dividend will be paid on the 13th of September, 2021, to all qualified shareholders whose names appear on the Register of Members as at 13th of August, 2021.
Analysts at Cordros research , added that, “Gross margin (+382bps) came in higher as it expanded to 16.6 per cent (Q2-20: 12.7 per cent). The higher margin outturn was due to faster growth in revenue (+132.1 per cent y/y) relative to the cost of sales (+122.0per cent y/y).
“We highlight that the increased cost of sales was influenced by the rally in crude oil prices (Average Brent price: USD69.08/bbl in Q2-21 vs USD33.39/bbl in Q2-20). Furthermore, though we do not have management’s confirmation as of writing, we believe that the derivative contracts TOTAL entered with its trading partners in the latter part of 2020 to hedge price risk may have expired.
“Owing to the growth in gross margin, EBITDA and EBIT margins printed 11.5per cent and 9.5per cent (Q2-20: -0.1per cent and -4.5per cent), respectively.
“Net finance costs printed N607.32 million in Q2-21 (vs net finance income of N1.26 billion in Q2-20). The outturn was driven mainly by a 97.2per cent y/y decline in finance income.
“As of HY-21, the company’s total debt increased slightly by two per cent to N33.26 billion (FY-20: N32.61 billion).
“Total’s Q2-21 performance was in line with our expectations, as the topline surmounted last year’s low and returned to pre-pandemic levels.
“Just as we envisaged in our Q1-21 first glance report, given the rally in crude oil prices, costs have risen astronomically, and we think they will remain at their current level at least until 2022.
“The market reacted positively to the result, as TOTAL’s share price closed limit up as of market close. YTD, Total is up +48.5 per cent, compared to the Oil & Gas index (+39.1 per cent), and the broader All-Share index (-4.2per cent). Our estimates are under review.”
