Total Energies Nigeria’s Q3 pre-tax profit drops by 48.02% on FX losses

Infostride News has recently released its coverage of Total Energies’ 2023 third-quarter financial results, which indicates a 48.02% year-on-year decline in pre-tax profits, bringing the total to N3.145 billion. This decline has subsequently impacted the nine-month pre-tax profit for 2023, which stands at N16.621 billion, down from N18.783 billion in the same period last year.

Examining the key highlights for the third quarter of 2023 in comparison to the same period in 2022, the following data is available:

– Revenue: N147.974 billion, representing a significant growth of 15.45% year-on-year.
– Cost of sales: N126.889 billion, reflecting an 11.98% increase year-on-year.
– Gross Profit: N21.085 billion, a substantial 41.92% rise year-on-year.
– Other income: N1.230 billion, showing a positive growth of 34.71%.
– Net foreign exchange losses: N4.805 billion.
– Selling and Distribution Cost: N1.781 billion, indicating a staggering 146.78% increase year-on-year.
– Administrative expenses: N11.229 billion, showing a significant 35.60% rise year-on-year.
– Operating profit/(loss): N4.497 billion, marking a decrease of 37.06% year-on-year.
– Finance Income: N1.034 billion, a remarkable surge of 226.50% year-on-year.
– Finance Cost: N2.386 billion, reflecting a 69.15% increase year-on-year.
– Net Finance cost: N1.352 billion, indicating a 23.58% rise year-on-year.
– Profit for the period: N2.033 billion, a decline of 48.87% year-on-year.
– Earnings per share: N5.99, down by 48.85% year-on-year.
– Cash and cash equivalent: N118.982 billion, showing a significant increase of 43.83%.
– Total Assets: N426.583 billion, reflecting a substantial growth of 38.58%.

An in-depth analysis of these figures suggests that Total Energies’ notable decline in pre-tax profit is primarily attributable to several factors, including net foreign exchange losses, increased interest on loans, and higher operating expenses (OPEX).

One of the major contributing factors to the decline in pre-tax profit is the substantial net foreign exchange losses, which amounted to N4.805 billion in the third quarter. This led to a cumulative nine-month net foreign exchange loss of N6.308 billion. It is important to note that in the previous year, no such losses were reported during the corresponding period, signifying a significant change in the financial landscape.

However, there are positive aspects to Total Energies’ financial performance as well. The company managed to achieve a remarkable 15.45% growth in revenue for the third quarter of 2023. This growth in revenue outpaced the 11.98% increase in the cost of sales, which played a pivotal role in the overall 41.92% surge in gross profit. This robust revenue growth demonstrates the company’s ability to generate income and highlights its resilience in the face of challenges.

In conclusion, Total Energies’ 2023 third-quarter financial results show a decline in pre-tax profits, primarily attributed to net foreign exchange losses, increased interest on loans, and higher operating expenses. Despite this decline, the company’s ability to achieve substantial revenue growth reflects its resilience and continued commitment to delivering value to its stakeholders. Infostride News will continue to monitor and report on the developments and financial performance of Total Energies.