Total Nigeria’s Profit After Tax fell to N2B
Major downstream player Total Nigeria Plc audited financial for 2020 revealed the effect of COVID-19 pandemic on the company as its revenue plunged across all business segments by 29.1% year on year to N204.1 billion in Financial Year 2020.
The report had the following key highlights:
Cost of sales fell faster by 32.3% y/y to print at N173.9bn in FY-2020.
Furthermore, due to the decline in sales, Gross Profit and Operating Profit declined by 12.3% y/y and 64.0% y/y to print at N30.7bn and N3.5bn, respectively.
Overall, the company recorded a Profit before and after Tax of N2.9bn and N2.0bn respectively when compared to Profit before and after Tax of N3.0bn and N2.2bn respectively recorded in FY-2019.
Earnings per Share (EPS) fell by 9.4% y/y to N6.08 per share in FY-2020.
The firm proposed a dividend of N6.08 per share.
Network sales (70% of total sales), which measures sales at service stations, declined by 29.2% y/y to N143.3bn.
General trade (24% of total sales), which tracks sales to corporate customers, declined by 19.9%, as lockdown activity meant offices were fully or partially closed in 2020.
Revenue from Total Nigeria Aviation segment (6% of total sales) dropped by 53.2% y/y to N12.2bn, as domestic and international travel restrictions led to a reduction in sales of Jet-fuel and other aviation products.
Cost of sales declined faster than Revenue in FY-2020, down 32.3% y/y to N173.9bn in FY-2020.
As such, the firms’ cost margins printed at 85.0% in FY-2020 from 88.0% in FY-2019.
Consequently, Gross profit declined by 12.3% to N30.2bn in FY-2020.
However, Gross margin improved mildly to 14.8% in FY-2020, from 12.0% In FY-2019.
Similarly, TOTAL’s Operating Profit printed lower by 64.0% y/y, owing to weaker demand from sales and a 68.3% y/y drop in other income to N1.0bn, which arose from a 99.0% drop in gains on the disposal of assets from FY-2019.
The low-yield environment favoured TOTAL in 2020, as Net finance cost declined of 973.4% to N629.1m, a considerable improvement from N6.7bn in 2019.
This was due to the average interest rate on the firm’s overdraft and bank charges falling to 8.4% in FY-2020, from 14.8% in FY-2019.
Additionally, the improvement in Net finance cost was boosted by a 175.2% y/y increase in finance income, mainly owing to a 96.7% y/y increase in inflows from the Petroleum Equalisation Fund (PEF).
In terms of working capital management, the company’s cash balances, excluding balances with Total’s treasury, improved by 10.5% y/y to N4.2bn.
This was largely due to a drop in inventory purchases and an increase in accounts payable, up 35% to N73.7bn, mostly to the Total SA group’s sister companies, resulting in an increase in Total liabilities to N115.0bn from N105.0bn in FY-2019.
The company’s total amount owned to related subsidiaries increased 418% to N31.4bn in FY-2020 (previously N6.1bn).