April 30, 2025/Cordros Report

TotalEnergies Marketing Nigeria Plc (TOTAL) published its Q1-25 unaudited results yesterday (29 April), reporting a loss per share of NGN0.35 (vs earnings per share of NGN33.87 in Q1-24), marking the marketer’s first negative quarterly earnings print since Q2-20. The performance was driven by the decline in revenue (-17.9% y/y) and a higher finance cost (+94.1% y/y). 

Revenue declined by 17.9% y/y in Q1-25, driven by declines in revenue across its business segments – Network (-17.9% y/y | 54.0% of revenue), General Trade (-17.9% y/y | 35.0% of revenue) and Aviation (-17.9% y/y | 11.0% of revenue). We attribute the performance to the lower volumes in the period, even as product prices were higher compared to the prior period – PMS: +84.2% y/y; AGO: +22.7% y/y; and DPK: +54.6% y/y. We suspect that the influx of relatively cheaper products from the Dangote Refinery through its trading partners limited product offtake from TOTAL’s retail outlets and B2B channels. On a q/q basis, revenue declined by 10.6%.

Gross margin (-196bps y/y) declined to 11.1%, reflecting the contraction in revenue. Notably, cost of sales fell by 16.0% y/y, following declines across net changes in inventory of lubes, greases and refined products (-15.7% y/y) and transportation costs (-58.5% y/y). Consequently, EBITDA (-380bps) margin contracted to 3.9%, amid a 10.3% y/y increase in operating expenses.
 
Net finance cost increased by 216.3% y/y, following a surge in finance cost (+94.1% y/y) and a 41.0% y/y decline in finance income. The higher finance cost is as a result of a 271.0% y/y increase in interests on overdrafts, following a higher overdraft balance reported in the period (NGN103.15 billion vs Q1-24: NGN44.68 billion) relative to the prior year.
 
Overall, PBT declined by 93.3% y/y to NGN1.12 billion (Q1-24: NGN16.84 billion). After accounting for a tax expense of NGN1.24 billion, the company made a loss after tax of  NGN120.03 million (vs PAT of NGN11.50 billion in Q1-24).

Comment: Despite higher product pricing, TOTAL’s numbers came in lower compared to the previous year, likely affected by lower volumes, which we attribute to increased competition from the Dangote Refinery and its partners. In addition, elevated finance costs further weighed on profitability and earnings for the period. Looking ahead, we believe TOTAL’s performance may remain subdued as we expect sales volumes to remain under pressure based on current factors amid slower growth in prices. Our estimates are under review.