Revenue Performance & Market Drivers
In Q4-24, TOTAL recorded a 16.2% y/y revenue increase, reflecting growth across its business segments—Network (+16.2% y/y, 54.0% of revenue), General Trade (+16.2% y/y, 35.0% of revenue), and Aviation (+16.0% y/y, 11.0% of revenue). The revenue boost was primarily driven by higher fuel prices, with Premium Motor Spirit (PMS) rising by 87.9% y/y, Automotive Gas Oil (AGO) by 43.4% y/y, and Dual Purpose Kerosene (DPK) by 54.8% y/y as of October. Petroleum products, which accounted for 79.2% of total revenue, posted a modest 7.4% y/y growth, while lubricants & other products (20.8% of revenue) surged by an impressive 69.6% y/y. However, quarter-on-quarter (q/q), revenue declined by 6.0%, signaling some seasonal fluctuations.
Profitability Pressures & Cost Dynamics
Despite strong revenue growth, TOTAL’s profitability faced headwinds due to escalating costs. The company’s gross margin contracted by 315 basis points (bps) y/y to 8.9% in Q4-24, as cost of sales grew at a faster pace (+20.4% y/y) than revenue. This was largely influenced by a 23.3% y/y uptick in net changes in inventories, reflecting the volatility of crude oil prices and the naira depreciation, which affected ex-depot prices for refined petroleum products. On a full-year basis, the gross margin dropped by 180bps to 11.1%.
However, TOTAL managed to improve its operational efficiency, as both EBITDA and EBIT margins expanded by 173bps y/y and 180bps y/y, respectively, reaching 4.4% and 3.7%. This was largely driven by a substantial increase in other income (+11.6x y/y to NGN14.27 billion), following a NGN12.83 billion writeback on charges for no longer required technical services.
Financial Costs & Bottom Line Performance
The biggest challenge in Q4-24 was the surge in net finance costs, which spiked by 185.4% y/y to NGN8.71 billion, driven by a 117.7% y/y rise in finance costs. The sharp increase was mainly due to higher interest expenses on import loans (+513.9% y/y) and bank overdrafts (+255.2% y/y), a direct consequence of Nigeria’s elevated interest rate environment. Meanwhile, finance income declined by 17.9% y/y, further squeezing profitability.
As a result, TOTAL’s profit before tax (PBT) in Q4-24 dropped by 56.7% y/y to NGN415.51 million, while profit after tax (PAT) fell sharply by 80.9% y/y to NGN398.84 million. Despite this quarterly decline, the company delivered an impressive 2024FY performance, with PBT increasing by 139.2% y/y to NGN42.27 billion and PAT rising by 114.2% y/y to NGN27.82 billion.
Outlook for 2025
TOTAL’s Q4-24 earnings aligned with expectations, showcasing robust revenue growth but also highlighting persistent cost pressures. The company’s ability to navigate rising interest rates and currency volatility will be critical in shaping its 2025 performance. Looking ahead, TOTAL is expected to sustain its revenue momentum, driven by further increases in fuel prices. However, elevated finance costs and inflationary pressures may continue to weigh on profitability.
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