January 29, 2025/Cordros Report

TotalEnergies Marketing Nigeria Plc (TOTAL) published its Q4-24 unaudited financials today, reporting an 81.0% y/y decline in standalone EPS to NGN1.77 in Q4-24 (Q4-23: NGN6.16) undermined by an uptick in net finance cost (+185.4% y/y). However, 2024FY EPS increased by 115.5% y/y to NGN81.94 (2023FY: NGN38.03), supported by the record revenue print (NGN1.04 trillion; +63.8% y/y) particularly in H1-24.

TOTAL’s Q4-24 revenue grew by 16.2% y/y (2024FY: +63.8% y/y), driven by a broad-based increase across its business segments – Network (+16.2% y/y | 54.0% of revenue), General Trade (+16.2% y/y | 35.0% of revenue) and Aviation (+16.0% y/y | 11.0% of revenue). Precisely, the improved performance was driven by the higher fuel prices – PMS: +87.9% y/y; AGO: +43.4% y/y; and DPK: +54.8% y/y (as of October) – in the period. Dissecting by product type, while maintaining dominance, petroleum products (79.2% of revenue) sales grew tepidly by 7.4% y/y, while lubricants & others (20.8% of revenue) surged by 69.6% y/y. On a q/q basis, revenue declined by 6.0%.

Gross margin in the quarter declined by 315bps y/y to 8.9% due to the faster increase in the cost of sales (+20.4% y/y) in relation to revenue (+16.2% y/y). Specifically, the growth in the cost of sales was primarily driven by the 23.3% y/y uptick in net changes in inventories, reflecting the impact of crude oil price volatility and currency depreciation on the ex-depot prices of refined petroleum products. For the full year, the gross margin declined by 180bps y/y to 11.1%.

EBITDA (+173bps y/y) and EBIT (+180bps y/y) margins expanded to 4.4% and 3.7%, respectively, largely due to the significant increase in other income (+11.6x y/y to NGN14.27 billion) following a NGN12.83 billion writeback on charges for no longer required technical services.

Further down, net finance cost surged by 185.4% y/y to NGN8.71 billion (Q4-23: NGN3.05 billion) due to a 117.7% y/y increase in finance cost. We highlight that the increased finance cost was primarily facilitated by the higher interests on import loans (+513.9% y/y) and bank overdrafts (+255.2% y/y), reflecting the elevated interest environment. Meanwhile, finance income declined by 17.9% y/y.

Consequently, profit before tax declined by 56.7% y/y to NGN415.51 million in Q4-24 (2024FY: +139.2% y/y to NGN42.27 billion). After accounting for a tax expense of NGN16.67 million, profit after tax declined by 80.9% y/y to NGN398.84 million in Q4-24 (2024FY: +114.2% y/y to NGN27.82 billion).
 
Comment: TOTAL’s numbers aligned with our expectations, demonstrating significant topline growth attributable to increased PMS prices amid ongoing cost pressures. However, earnings for the quarter were impacted by the significant uptick in net finance cost. For 2025FY, we expect that TOTAL will remain resilient and achieve significant growth in its topline, specifically driven by the expectation of higher prices, even as still sticky cost pressures may limit profitability. Our estimates are under review.