April 24, 2026/Cordros Report
In this report, we update our outlook and estimates for TotalEnergies Marketing Plc for 2026E. Revenue performance was subdued in 2025FY, declining by 26.3% y/y to NGN767.63 billion. The contraction was largely volume-driven, with weaker sales offsetting the benefit of higher product prices. EBITDA margin declined to 2.5% (-410bps y/y), and the company reported a loss per share of NGN40.80, reflecting underlying operating weakness. We revise our target price to NGN221.41/share and maintain our “SELL” recommendation. The downgrade reflects our expectations of sustained operational weakness amid persistent cost pressures, which would continue to weigh on earnings performance. Based on our 2026E estimates, TOTAL trades at an EV/EBITDA multiple of 13.0x, implying a discount to the MEA peer average of 13.4x.
Earnings expected to remain under pressure in 2026E: We forecast revenue growth of 12.6% y/y driven by the increase in volumes and product prices. Following the elevated crude oil prices due to heightened geopolitical tensions in the Middle East, we forecast the 2026E average PMS price at NGN1,163.09 (2025FY: NGN1,104.58) based on our assumptions of Brent crude price of USD96.00/bbl, PMS gantry price of USD0.79/litre and an average exchange rate of NGN1,400.00/USD. Following an estimated 50.4% decline in volumes in 2025FY, we anticipate a recovery in volumes (+13.7% y/y). This rebound is underpinned by the marketer’s offtake agreement with the Dangote Refinery, which is expected to improve pricing competitiveness, reversing the customer attrition seen in the prior year and supporting a recovery in sales volumes. On profitability, we project EBITDA margin to contract by 20bps to 2.3%, as cost pressures largely offset topline growth. COGS is expected to rise in line with revenue at 12.6% y/y, while a 3.3% y/y increase in operating expenses adds further drag. Below the operating line, we forecast loss per share of NGN18.58 in 2026E (2025FY: NGN40.80).
Leverage profile remains stretched: TOTAL’s leverage profile remains stretched in 2026E, reflecting the continued pressure on operating performance. Net debt to EBITDA is projected to improve slightly to 1.9x from 2.1x in 2025FY, driven primarily by a reduction in net debt to NGN37.94 billion (2025FY: NGN40.59 billion). The net debt-to-equity ratio is expected to hold steady at 0.9x, as a rising debt burden (2026E: NGN94.96 billion vs NGN85.37 billion in 2025FY) is accompanied by a contraction in the equity base to NGN44.37 billion (2025FY: NGN47.54 billion). The erosion in equity reflects the cumulative drag from subdued profitability, with retained earnings continuing to compress the book value base. While the Interest coverage ratio is expected to improve to 0.5x (2025FY: 0.4x), it remains well below the five-year historical average of 5.0x, signalling that operating earnings continue to fall materially short of debt servicing requirements.
Valuation: Our year-end target price is NGN221.41/s, derived from an 80/20 blend of DCF and sector relative valuation estimates (EV/EBITDA). Our DCF FV is derived from an equal blend of FCFF (NGN200.31/s) and FCFE (NGN32.53/s) estimates, assuming a 22.3% WACC, 24.8% CoE and a 4.0% terminal growth rate. Similarly, our multiples based FV was derived from EV/EBITDA (NGN641.39/s) multiple, utilizing Bloomberg’s Middle East and African peer median of 13.1x as multiplier.
