Total Nigeria Plc suffered a major contraction in the immediate past business year with a record N2.42 billion net loss in 2019. The management of the company did not provide immediate reasons for the negative performance.
Interim report of the downstream oil company for the year ended December 31, 2019 showed declines in sales and profitability, raising concerns that the company may not be able to declare dividend for the first time in decades.
The report, which is undergoing final audit review and approval, showed a net loss of N2.42 billion in 2019 as against net profit of N7.96 billion in 2018. Pre-tax profit had reversed from N12.1 billion in 2018 to pre-tax loss of N3.65 billion in 2019. Turnover declined from N307.99 billion in 2018 to N290.88 billion in 2019.
The six-month report for the period ended June 30, 2019 had shown that sales dropped by three per cent but increased costs of sales and administrative expenses as well as finance costs depressed the bottom-line by 98 per cent. Turnover had dropped to N150.83 billion in first half 2019 as against N156.27 billion in first half 2018. Gross profit declined from N21.2 billion to N16.7 billion. Operating profit also slumped from N10.18 billion to N3.94 billion. With net finance costs rising from N1.54 billion to N3.74 billion, profit before tax dropped from N8.65 billion in first half 2018 to N202 million in first half 2019.
While provisions for taxes reduced from N2.97 billion in 2018 to N72.12 million in 2019, the company ended the first half down with net profit of N130 million as against 5.67 billion recorded in comparable period of 2018.
Total Nigeria had shown resilient performance in 2018 despite long-running industry headwinds including controlled margins and supply. The audited report and accounts for the year ended December 31, 2018 had shown that turnover increased from N288 billion in 2017 to N307 billion in 2018. Profit before tax rose to N12.09 billion as against N11.79 billion in 2017. Profit after tax however dipped slightly to N7.96 billion in 2018 compared with N8.01 billion in 2017.
Chairman, Total Nigeria Plc, Stanislas Mittelman, said the company would use solar power to power its 60 stations in order to ensure stability of import, logistics optimisation and maximisation of its solar business.
He said the company had signed a 15-year power purchase agreement with a manufacturing company in Ogun State to provide 999k wp solar hybrid solution.
According to him, with a combined capacity of 1MW and production of more than 1 gigawatt hour of clean electricity, the company recognises the potential of solar, hence its programme of powering its stations which have been equipped with solar to supply electricity.
“We remain a brand of reference and leading energy solutions provider and we are confident that the company will continue to grow and even though the working capital reduced this year, we still remain conscious of our role in the Nigeria economy with the support of our stakeholders and shareholders and we expect to consolidate on our past achievements and deliver value to our shareholders as we are well positioned to overcome the challenges of the business environment in 2019,” Mittelman said.
