INDUSTRY REVIEW: Five best performing oil and gas companies in Nigeria, Q1 2022

It’s been two years since the oil industry experienced a meltdown in their earnings, with oil price falling to as low as $20 due to Coronavirus outbreak and COVID-induced lockdown.

For almost a year, the lockdown disrupted oil supply chains, knocking down demands, as transportation and other oil-driven industries were completely and temporarily shutdown, before making a return to operation last year.

But two years after the global lockdown, oil price has risen to its highest level in recent years, trading currently at $113.6, with international oil companies cashing out after the 2020 loss – however, not all Nigerian companies are milking from this price surge, according to analysis of their earnings for Q1 2022.

What you need to know

Oando, Ardova and Rak Unity Petroleum Company were not among companies analysed, as they are yet to release their financials for the period under review, while revenues generated by Total, Seplat, Eterna, Conoil and MRS were tracked for this report.

• Ripples Nigeria analysis of five quoted companies, whose financials are publicly accessed, showed revenue grew 42% in the three months of Q1 this year, however, they could only manage 7.53% growth in Profit After Tax (PAT).

• The five oil and gas companies generated a total of N269.09 billion revenue in Q1 2022, against the N189.45 billion the firms grossed during the corresponding period of Q1 last year.

• While PAT for first quarter 2022 reached N14.09 billion, slightly above the N13.10 billion generated same period 2021.

• A closer look showed that the first quarter of this year wasn’t a good outing for Conoil, as it had the worst performance among the companies analysed, based on decline in revenue, while only MRS recorded loss in profit after tax.

Breakdown: Best performing oil companies in Nigeria Q1 2022

Ripples Nigeria’s quarterly best performing oil and gas companies is determined by the growth of the oil companies turnover within the three months of each quarter, and that of Q1 falls between January to March.

Eterna – (84.8%)

Eterna oil ended the first quarter as the best performing oil and gas company, as its revenue grew 84.8% year-on-year, after grossing N26.8 billion, surpassing the N14.38 billion generated in Q1 2021 with N12.43 billion.

• It’s profit after tax also outperformed its rivals, with Eterna reporting N877.46 million in Q1 2022.

• This is 244.8% higher than the N254.4 million recorded same period last year – representing a growth of N623.01 billion.

Read also: Banks loans to oil and gas companies jump to N5.68tn

Seplat – (73.6%)

Seplat was the second best performing company after growing its revenue to N100.61 billion in the first quarter 2022, a 73.6% difference (representing N42.68 billion) when compared to the N57.93 billion of last year Q1.

• However, Seplat wasn’t so lucky, as its profit after tax depreciated by -12.2%, as the oil and gas firm closed Q1 2022 with N8.29 billion.

• Seplat lost out on at least N1.15 billion, considering its profit after tax for the corresponding period of Q1 2021 was N9.44 billion.

Total (46.3%)

The foreign oil company generated N97.60 billion between January to March 2022, increasing its revenue by 46.3%. Which means Total added N30.91 billion to the N66.69 billion grossed in Q1 2021 – making it the third best performing firm in the sector, based on earnings tracked.

• Total’s profit after tax grew faster than its revenue during the period under review, increasing by 46.9% (N1.39 billion) in Q1 this year, recording N4.36 billion.

• The company surpassed the N2.97 billion it reported as profit after tax last year first quarter, making it one of three firms to report growth in PAT.

MRS (3.15%)

MRS reported the slowest growth of 3.15% among the companies analysed, as its turnover grew by N546.71 million to N17.89 billion, slightly above the N17.34 billion the oil firm reported in Q1 2022.

• Following three months of operation, MRS was the only company to suffer a loss after tax, reporting N41.45 million loss during the period under review.

• MRS recorded a poor performance, failing to surpass the N4.77 billion profit after tax recorded during the corresponding period of Q1 2021.

Conoil (-20.9%)

Year-on-year, Conoil’s turnover declined by -20.9%, with the company generating N26.14 billion in the first quarter this year, falling short by N6.94 billion when compared to the N33.09 billion grossed in Q1 2021.

• Despite its revenue dip, Conoil managed to grow its profit after tax for the period of Q1 2022 by N133.29 million, to N557.22 million.

• The oil and gas company’s profit after tax appreciated by 31.4% when compared to the N423.93 million Conoil reported as PAT in Q1 last year.

Note: The increment in oil price is yet to translate into higher earnings for the oil companies in Nigeria, as the Federal Government is yet to increase pump price to reflect market reality, and the firms are very much dependent on fuel subsidy.

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