Total Nigeria, Seplat Petroleum, Others Revenue Hits N500.93bn in H1 2021 Amidst Higher Margin in Products Sales

Darasimi Adebisi

Listed Oil & gas companies on the Nigerian Exchange Limited (NGX) reported growth in profit and revenue driven by hike in prices of Premium Motor Spirits (PMS), among others.

The Oil & gas companies that have so far released their half year results for period ended June 30, 2021 on NGX are; Ardova Plc, Total Nigeria Plc, MRS Nigeria Plc, Conoil Plc, Seplat Petroleum and Eterna Plc.

For the period under review, these companies grew revenue by 30per cent to N500.93 billion when compared to N384.08 billion reported in half year ended June 30, 2020.

Also, profit for the period moved from N379.8million in H1 2020 to N11.39billion in H1 2021.

The federal government had early this year wanted to suspend subsidy payment on imported petroleum product, PMS, when the global oil price gained significantly over Crude oil production cut by the Organization of the Petroleum Exporting Countries (OPEC).

A report by National Bureau of Statistic (NBS) revealed that average price of PMS between June of 2020 and June 2021 has increased by 28.49 per cent to N165.61 per litre from N128.88 per litre sold last year.

The report by NBS also stated that price of Automotive Gas oil (Diesel) rose by 8.05 per cent to N242.42 per litre this year from N224.37 litre sold last June.

The price of PMS, better known as petrol, currently hovers around N162/N163 per litre.

However, the fact that the price of the commodity is still been sold at an average of N162/N163 per litre stations across the country, meant that the federal government, through the Nigerian National Petroleum Corporation (NNPC) is still subsiding a litre of the commodity for Nigerians.

Specifically, an independent indigenous Nigerian energy company, Seplat Petroleum Plc in the period under review grew revenue by 50.4 per cent to N120.44billion in H1 2021 from N80.12billion reported in H1 2020.

The company listed on NGX and London Stock Exchange reported a profit of N14.12 billion in H1 2021 from a loss of N37.78billion reported in H1 2020.

Capital market analysts have urged investors to invest in listed Oil and gas stocks with strong fundamentals rather than patronizing banking stocks as most are struggling to survive numerous policies of the regulating bodies.

In the period, two companies, Total Nigeria and Seplat Petroleum declared interim dividend of N4.00 and $2.5 cents respectively.

On its part, Conoil Plc also grew revenue by 17.7 per cent to N67.6billion in H1 2021 from N57.46billion reported in H1 2020 to drive profit by 214 per cent to N1.06billion in H1 2021 from N338.7million reported in H1 2920.

The growth in profit drive the company’s Earning Per Share to N1.53 in H1 2021, about 214 per cent increase over N0.49 reported in H1 2020.

A multination petroleum marketing company, Total Nigeria Plc reported N8.07billion profit in H1 2021 from N537.2million loss reported in H1 2020 over 41.8 per cent increase in revenue to N151.33billion in H1 2021 from N106.7billion reported in H1 2020.

Analysis of the results released by Eterna Plc showed that the company migrated from a loss of N66.58million in H1 2020 to N310.5million in H1 2020, attributable to 33 per cent increase in revenue to N37.99billion in H1 2021 from N28.52billion reported in H1 2020.

In addition, MRS Oil & Gas also migrated from a loss of N329.7million in H1 2020 to N151.5million in H1 2021, driven by 53.2 per cent increase in revenue to N36.7billion from N23.99billion reported in H1 2020.

In his reaction, the MD/CEO Enterprise Stockbrokers Plc, Rotimi Fakayejo attributed the Oil & Gas performance to higher margin in crude oil products, stressing that the ease of movement also contributed to revenue and profit.

According to him, “These companies reported increase in revenue due to higher margin in products sale this year. The restriction of movement eroded their revenue last year but with the ease on COVID-19 lockdown, they were able to grow revenue that translates into profit.”

He maintained that investors can always consider buying Total Nigeria shares over its intrinsic fundamentals on the NGX.

In his words, “Total Nigeria is one of the most reliable Oil & gas stock on NGX and the company by year end is going to have EPS of N35.00. The company’s payout is always 70 to 80 per cent every year and they may still pay dividend of N20.00 at the end of 2021 financial year. It makes a lot of sense for investors to buy Total Nigeria and Seplat Petroleum shares on NGX.”

Related Articles