TotalEnergies Marketing Nigeria Plc published its unaudited fourth-quarter financials for the period ended December 31, 2023, reporting a 41.6% decline in standalone EPS to N6.22 in fourth quarter of 2023 against N10.64) in same period in 2022, undermined mainly by an uptick in net foreign exchange.

As a result, the 2023 full year EPS settled lower at N38.09 against N47.47 2022 full year.

Revenue grew by 46.9%, driven by an increase in its Network and General Trade business segments; while Aviation sales declined.

Analysts attribute the improved performance in the network segment to the higher fuel prices PMS: AGO: and DPK: in the period.

Disaggregating by products, the marketer recorded broad base expansion across the petroleum products and lubricants and other products.

On a quarter to quarter basis, revenue increased by 44.2% following gains across the Network l General Trade, and Aviation business segments.

Gross margin expanded by 136bps to 12.0%, highlighting the higher product prices.

Market watchers, note that cost pressures remained intact, as the cost of sales increased by 44.6% driven by net changes in inventories.

Consequently, EBITDA and EBIT margins declined to 2.9% and 1.9%, respectively, following a 93.5% increase in operating expenses coupled with substantial FX losses.

Net finance cost surged by 139.6% to N2.96 billion , due to a 118.3% increase in finance cost.

Analysts highlight that the increased finance cost was primarily facilitated by the higher balance in interest on other loans and interest on bank overdrafts.

Meanwhile, finance income grew by 86.1% supported by higher interest on deposits, interest on other loans, and interest on deposits for unclaimed dividends.

Overall, profit before tax declined by 82.7% to N992.89 million against N5.75 billion in fourth quarter of 2022.

Following a tax expense of N1.12 billion, profit after tax was N2.11 billion against N3.61 billion in fourth quarter of 2022.

Total 2023 full year performance mirrors the numerous challenges prevalent in the downstream oil and gas sector, with the primary issues being the foreign exchange  losses and escalating finance costs that partly dragged the company’s earnings.

While the market anticipate the company to demonstrate resilience by leveraging its market leadership position in the downstream oil and gas sector, they anticipate the cost pressures stemming from the unfavourable macroeconomic conditions may impede the company’s performance into 2024 full year.