Although insecurity in the country and other macroeconomic challenges, coupled with uncertainty in the global economy, may have continued to weigh on the Nigerian Exchange Limited (NGX), the increase in global demand for crude has boosted the performance of five major indigenous oil and gas groups. listed companies.
Specifically, these companies earned a pre-tax profit of N103.57 billion in the nine months ended September 30, 2022, representing a 68.2% increase from the N61.57 billion recorded in during the corresponding period in 2021.
The companies are Seplat Energy Plc, Conoil Oil Plc, TotalEnergies Marketing Nigeria Plc, Eterna Plc and MRS Oil Nigeria Plc.
According to the financial statements of the five oil and gas companies, only the performance of TotalEnergies Marketing was negatively affected by endogenous and exogenous challenges currently hampering the country’s business environment, as the company recorded a decline in pre-tax profit to 18.78 billion naira in nine months of 2022 from 19.72 billion naira in nine months of 2021.
On the world market, the average price per barrel of crude as of September 30, 2021 was $67.71 compared to the average price of the same product at $104.81 as of September 30, 2022.
Consequently, the Nigerian market has witnessed an increase in the price of Premium Motor Spirit (PMS) or Gasoline at an average price of N179.42 in nine months of 2022 from an average price of N166.29 in the year corresponding to 2021, according to the National Bureau of Statistics (BNS).
The average retail price of automotive gas oil (diesel), according to the BNS in September 2022, was N789.90 per liter, an increase of 210.20% compared to N254.64 per liter recorded in the corresponding month of the previous year.
The five companies increased their revenue by 34% to N847.28 billion in nine months of 2022 from N632.34 billion in nine months of 2021.
For example, Conoil recorded a 67.5% increase in pre-tax profit to N3.93 billion in nine months of 2022 from N2.3 billion in nine months of 2021, while MRS Oil Nigeria reported recorded an unprecedented increase in its profit before tax to 1.49 naira. billion in nine months of 2022 compared to 306.98 million naira in nine months of 2021.
Seplat Energy recorded a 100.56% increase in pre-tax profit from N38.63 billion in nine months of 2021 to N77.47 billion in the corresponding period of 2022, while Eterna announced a 244.66% increase in its pre-tax profit from N566.89 million to N1.9 billion in nine months of 2022.
Over the weekend, traders linked the performance of oil and gas companies to rising gasoline, diesel and lubricant price margins, noting the impact is being felt in the NGX index. Oil & Gas which outperformed the other NGX sector indices.
The development also had a positive impact on the NGX Oil & Gas Index on the Stock Exchange, which appreciated by 31.78% as of November 11, 2022, while the NGX All-Share Index (ASI) recorded a year-to-date gain of 2.93 percent. hundred.
Reacting to the performance, Seplat Energy Managing Director Roger Brown said that despite an unusually difficult quarter for the Nigerian oil and gas industry, with major export routes unavailable due to force majeure, the company had demonstrated a high level of resilience. in his business.
“The Amukpe-Escravos pipeline has been operational since August and we had our first oil export this month. The Trans Forcados pipeline has now resumed operations and we continue to increase our use of alternative export routes, giving us confidence that the last quarter of the year will show some improvement in volumes.
Investors Alternative Dispute Resolution Initiative (IADRI) Chairman Moses Igbrude said: “This is a good performance and a great result. This despite the unfavorable economic environment where the government is a competitor and sole importer of oil, coupled with a shortage of foreign exchange, kudos to them.
He urged listed companies to focus more on their areas of competitive advantage such as lubricant production, diesel import, insecticide production as well as auto services and any other areas in which they can achieve growth. good margins in their business operations.
Igbrude also urged them to do everything in their power to effectively manage operational costs to shore up their performance.