TotalEnergies Marketing Nigeria Plc has posted an impressive financial performance for the 2024 fiscal year, showcasing remarkable growth across key financial metrics. The company’s revenue exceeded ₦1 trillion for the first time, supported by strong product demand and strategic market expansion. However, the absence of a dividend payout has raised investor concerns despite a surge in profitability.
Key Financial Highlights
- Revenue: ₦1.04 trillion (2023: ₦635.95 billion) → 64% increase
- Profit Before Income Tax: ₦42.27 billion (2023: ₦17.58 billion) → 140% increase
- Net Profit: ₦27.82 billion (2023: ₦12.91 billion) → 115% increase
- Total Comprehensive Income: ₦27.82 billion (2023: ₦12.92 billion) → 115% increase
- Earnings Per Share (EPS): ₦81.94 (2023: ₦38.03) → 115% increase
- Stock Exchange Quotation: ₦698 per share (2023: ₦385 per share) → 81% increase
Revenue Growth Analysis
TotalEnergies Nigeria achieved an outstanding 64% revenue growth, crossing the ₦1 trillion mark, a milestone driven by:
- Increased Demand: Rising fuel consumption and strong sales in lubricants.
- Inflationary Effects: Price adjustments to counter rising costs.
- Foreign Exchange Impact: The devaluation of the naira contributed to higher reported revenue in nominal terms.
Despite rising costs, the company’s profitability surged, with net profit more than doubling year-over-year.
Operational Highlights & Cost Management
- Gross Profit: ₦115.75 billion (2023: ₦81.82 billion) → 41% increase
- Cost of Sales: ₦926.15 billion (2023: ₦554.13 billion) → 67% increase
- Selling & Distribution Costs: ₦64.56 billion (2023: ₦44.37 billion)
- Administrative Expenses: ₦14.66 billion (2023: ₦6.66 billion)
- Finance Costs: ₦26.02 billion (2023: ₦10.2 billion)
TotalEnergies’ cost of sales grew at a faster rate than revenue (67% vs. 64%), primarily due to:
- Inflationary pressures: Nigeria’s inflation rate stood at 34.8% as of December 2024.
- Foreign exchange fluctuations: The Naira depreciated to ₦1,533 per USD in January 2025.
- Higher operational expenses: Increased logistics, marketing, and administrative costs.
Profitability Amid Rising Costs
Despite rising expenses, profit before tax increased by 140%, indicating strong pricing power and operational efficiency. However, finance costs surged due to higher interest rates (MPR at 27.5%), which inflated the cost of borrowing.
Capital Expenditures & Shareholder Returns
- Total Assets: ₦536.8 billion (2023: ₦375.1 billion) → 43% increase
- Total Equity: ₦75.41 billion (2023: ₦56.08 billion) → 34% increase
- Trade & Other Receivables: ₦210.46 billion (2023: ₦152.11 billion)
- Loans & Borrowings: ₦115.7 billion (2023: ₦84.54 billion)
- Cash & Cash Equivalents: ₦91.31 billion (2023: ₦88.16 billion)
The company strengthened its balance sheet, with total assets growing by 43%. The rise in receivables suggests aggressive sales expansion, while increased borrowings reflect funding needs for working capital.
Dividend Decision and Investor Reaction
One of the most significant developments was TotalEnergies’ decision not to declare a dividend for 2024, compared to a ₦25 per share payout in 2023. This move signals a strategic shift toward reinvestment rather than immediate shareholder returns.
Market Response
- Stock price surged to ₦698, an 81% increase year-over-year.
- Investors reacted positively to the company’s growth trajectory, but some raised concerns over the lack of dividend payments.
- The company cited “financial prudence and reinvestment priorities” as reasons for withholding dividends.
Macroeconomic Context & Industry Trends
The Nigerian economic environment presented both challenges and opportunities for TotalEnergies:
- Inflation at 34.8% in December 2024 impacted operational costs.
- Monetary policy rate (MPR) at 27.5% increased the cost of capital.
- Crude oil price at $74.72 per barrel, affecting upstream and downstream profitability.
- Exchange rate volatility, with the naira closing at ₦1,533 per USD in January 2025.
These factors influenced TotalEnergies’ financial decisions, particularly in cost management and capital allocation.
Future Outlook
TotalEnergies Nigeria remains optimistic about its growth potential but acknowledges key risks:
- Cost Optimization and Debt Management
- The company will focus on controlling operational expenses amid inflationary pressures.
- Reducing finance costs through strategic debt refinancing.
- Revenue Growth through Diversification
- Expanding renewable energy investments in solar and sustainable energy solutions.
- Increasing market penetration in lubricants and gas distribution.
- Economic Risks
- Continued inflation and foreign exchange fluctuations remain major uncertainties.
- The potential for regulatory changes in the petroleum sector.
Final Thoughts
TotalEnergies Marketing Nigeria Plc delivered an exceptional performance in 2024, with record revenue and profits. The company’s decision to prioritize reinvestment over dividends suggests a long-term vision, but it remains to be seen how investors will react to this strategy in the coming quarters.
The company’s ability to navigate economic uncertainties, optimize costs, and drive future revenue from diversified energy solutions will be crucial to sustaining its impressive growth.
