TotalEnergies increases profit by eight times to N16.7bn in 2021

TotalEnergies, the only international company operating in Nigeria’s downstream sector has recorded a 711% increase in its profit from a N16.72 billion compared to N2.06 billion in the previous year, the highest in its five-year financials.

The energy marketing company’s unaudited financial report for the entire year of 2021 shows a significant return from its poorest performance in years in 2020, with new highs in revenue and profit numbers in 2021.

The change was fuelled in large part by a 30% increase in sales revenue from the previous fiscal year to a 66.7% increase in 2021.

Enhancing high-speed recovery and growth resulted in significant cost reductions across the board, extending revenue advantages; the only exception to the year’s cost control was tax costs, which soared nearly tenfold to absorb 33% of pre-tax earnings.

The company ended its full-year operations in 2021 with sales revenue of over N341 billion, a new high in turnover after a nine-year low in 2020.

The company’s major revenue line, petroleum products, recovered from a 35% drop at the end of 2020 to a record gain of 62.4% at the end of the year.

Selling & distribution costs rose to N3.23 billion from N2.96 billion in the comparable periods. Administrative expenses stood at N29.8 billion, a 19% increase compared to N25.06 billion in the period under review.

Finance income dropped to N831 million from N2.26 billion in the comparable periods. Assets grew 44.3% to N207.2 billion in the full year 2021 compared to N143.6 in the corresponding period last year.

Net cash generated from operating activities jumped to N60.6 billion from N44.6 billion in the comparable period. Net cash used in investing activities recorded a year-on-year loss of N9.37 billion compared to N8.28 billion in the year-ago period.

Net cash generated from financing activities recorded a loss of N18 billion in December 2021 compared to N9 billion gained in 2020.

Sales revenue for lubricants and other items, on the other hand, increased by 80.7%; At the conclusion of the year, the increase in sales revenue amounted to nearly N136 billion.

Other income, which grew by 330% to N4.4 billion for the year, offered a further boost to profitability.

Despite the quick increase in the fourth quarter, the cost of sales increased by 64.5% to N286 billion, compared to 66.7% growth in sales. However, the cost savings were sufficient to propel an almost 80% increase in gross profit to N55 billion by the end of the year.

Operating expenses increased by only a little amount this year, increasing the company’s profit potential. Operating profit increased from N3.5 billion in 2020 to about N26 billion at the end of the year.

A reduction in finance costs of 38.7% was more than offset by a reduction in finance income of 63%. Net finance expenses increased by over half to N941 million by the end of 2021 as a result of the modifications.

The reduction in financing costs is due to a 54% reduction in the company’s borrowings, which were reduced to less than N15 billion by the end of the year.