TotalEnergies Profit Slumps 20% as FX Losses Bite
Total Energies and Marketing Nigeria Plc’s profit declined by about 20%, according to details from its financial statement as higher funding costs damaged positive impacts of healthy revenue growth.
In 2023, the company reported N635.95 billion in revenue, which represents about 32% year-on-year growth from N482.47 billion in the corresponding period of 2022.
This was driven by improvement in revenue generated from streams such as the sales of petroleum products which came at N509.31 billion and the sale of lubricants and other products of N126.64 billion.
The total turnover was offset by costs which erupted by 31% to N554.13 billion and impairment loss on financial assets to N358.57 million. On the flip side, the net income slipped by 19.8% to N12.93 billion in 2023 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.
