MRS Oil Nigeria Plc delivered strong financial results for the full year ended December 31, 2024. Revenue grew by 71.28% year-over-year (YoY), rising from NGN182.31bn in FY:2023 to NGN312.23bn in FY:2024. This robust performance primarily reflects the ongoing positive effects from the petroleum pricing deregulation implemented by the Nigerian government in May 2023, which significantly elevated fuel prices and consequently boosted revenues in 2024.

Despite impressive top-line growth, cost of sales increased substantially by 72.32% YoY, from NGN167.31bn to NGN288.31bn, driven largely by increased product procurement costs. Gross profit grew by 59.44%, from NGN15.00bn in FY:2023 to NGN23.92bn in FY:2024. However, gross profit margin slightly contracted from 8.23% in FY:2023 to 7.66% in FY:2024 due to rising input costs.

Operating profit saw significant growth, increasing by 60.86% YoY from NGN5.99bn to NGN9.65bn. Yet, the operating margin slightly narrowed from 3.29% to 3.09%, reflecting increased administrative expenses, which rose significantly due to higher management fees, fuel expenses, and operational overheads.

Net profit after tax (PAT) increased impressively by 60.80%, climbing from NGN4.05bn in FY:2023 to NGN6.51bn in FY:2024. Despite this growth, net profit margin slightly decreased from 2.22% in FY:2023 to 2.09% in FY:2024, influenced by increased finance charges and elevated impairment costs on financial assets.

A quarterly comparison (QoQ) highlights a weaker performance in the fourth quarter of 2024. Revenue declined significantly by 21.99%, from NGN81.43bn in Q4:2023 to NGN63.52bn in Q4:2024. Additionally, PAT fell sharply by 52.83%, from NGN606.23m to NGN285.93m. This weaker quarterly performance aligns with the operational commencement of the Dangote Refinery, suggesting that increased competition and supply dynamics may have negatively impacted MRS Oil Nigeria Plc’s market share and revenue performance during this period.

OUTLOOK

MRS Oil Nigeria Plc is strategically positioned to benefit significantly from its recent bulk purchase agreement with the Dangote Refinery, securing a stable and consistent supply of Premium Motor Spirit (PMS). This partnership is expected to considerably drive volume sales and provide a competitive advantage through increased supply reliability and stability.

Leveraging this strategic partnership, MRS Oil Nigeria Plc can effectively navigate market competition, maintain consistent supply to customers, and potentially improve profitability margins. While short-term market volatility and cost pressures persist, the collaboration with Dangote Refinery is a significant positive development likely to underpin volume growth and market position.

Overall, despite short-term challenges, we maintain a strongly positive outlook for MRS Oil Nigeria Plc, primarily driven by strategic procurement advantages, improved operational efficiencies, and ongoing benefits from sector deregulation. Therefore, we place a BUY recommendation for MRS.

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