TotalEnergies multiplies profit 8 times to N16.7b in 2021

TotalEnergies Marketing Nigeria Plc built an after tax profit of N16.7 billion at the end of the 2021 financial year, a clear eight times rise from the closing profit of N2 billion in the preceding year.

The company’s unaudited financial report for the 2021 full year shows a big rebound for the energy marketing company from the worst performance in years in 2020 to register new peaks in revenue and profit numbers in 2021.

The transformation was powered largely by rebuilding sales revenue from a drop of 30 percent in the prior financial year to a growth of 66.7 percent in 2021.

Enhancing the high-speed recovery and growth is also a considerable cost saving across the board that extended the gains in revenue. Tax expenses were the only exception to the cost moderation in the year, jumping close to 10 times to consume 33 percent of pre-tax profit for the year.

The highpoints in the company’s operations in the final quarter include a top record growth of 86.7 percent in sales revenue quarter-on-quarter to N99 billion. The accelerated growth in the final quarter raised the full year revenue growth from 60 percent at the end of the third quarter.

On the side of expenses, cost of sales grew ahead of revenue in the quarter at over 95 percent to N84.5 billion. That equally quickened the increase in cost of sales from 54 percent growth at the end of the third quarter to 64.5 percent at full year.

The incursion of input cost on gross profit in the final quarter was remedied by moderated increases in operating costs and a shift from other loss of N112 million to other income of N814 million quarter-on-quarter.

The favourable developments enabled a leap of 134 percent in operating profit quarter-on-quarter to over N5 billion. Despite a major increase in tax expenses in the quarter, the company lifted after tax profit by 113.6 percent quarter-on-quarter to N3.3 billion.

The strong final quarter contribution to profit helped to achieve the eight times leap in the bottom line for TotalEnergies in 2021.

The company closed 2021 full year operations with sales revenue of over N341 billion — marking a new peak in turnover from the nine-year low it recorded in 2020.

Petroleum products, which are the main revenue line of the company, recovered from a drop of 35 percent at the end of 2020 to a record growth of 62.4 percent at the end of the year.

Lubricants and other products however led the growth in sales revenue at an increase of 80.7 percent. The growth in sales revenue represents a gain of over N136 billion at the end of the year.

Other income provided a further boost on the side of earnings with an exceptional growth of 330 percent to close at N4.4 billion for the year.

Despite the rapid increase in the final quarter, cost of sales still moderated slightly relative to sales at an increase of 64.5 percent to N286 billion against 66.7 percent growth in sales. The cost saving there was however good enough to spur nearly 80 percent advance in gross profit to N55 billion at the end of the year.

There were only moderate increases in operating expenses in the year, which enlarged profit capacity for the company. Operating profit soared from N3.5 billion in 2020 to almost N26 billion at full year.

A drop of 38.7 percent in finance cost was more than neutralized by a drop of 63 percent in finance income. The changes led to an increase of nearly one-half in net finance expenses to N941 million at the end of 2021.

The drop in finance expenses reflects a 54 percent cut in the company’s borrowings to less than N15 billion at the end of the year.

The company’s closing profit of N16.7 billion at full year has beaten for the first time its peak profit of N14.8 billion posted in 2016. Shareholders can hope for a decent dividend when the audited accounts are issued.