Friday, April 27,
2018 /10:59 AM / FBNQuest Research
Nigeria reports Q1 2018 results
to slightly negative reaction by the market likely
sales and PBT both up 13% q/q and 24% q/q respectively
Relatively weak y/y trend across key P&L lines
Late yesterday, Total Nigeria (Total)
published Q1 2018 results which showed that sales were down -6% y/y to N75.6bn
while PBT also declined by -38.2% y/y to N2.6bn. A 188% y/y rise in net finance
charges were primary responsible for the more significant PBT decline.
To a lesser extent, a 9% y/y rise in opex
and 10% decline in other income did not help. The higher net interest expense
line broadly reflects a 33% y/y rise in debt levels. Total posted an income of
N920m accruing from gains on sales of PPE. However, the y/y trend on the other
income line was hampered by an fx-related loss of N583m compared with an fx
gain of N371m in Q1 2017. PAT declined -38% y/y to N1.7bn.
the y/y trend is unsurprising given that Total’s (and downstream majors)
preferential fx treatment lasted till Q1 2017; as such, product volumes and
profit margins were unusually high, relatively, in the prior year. On a sequential basis, both sales and PBT
were up 13% q/q and 24% q/q respectively. However, PAT declined -19% q/q.
Compared with our estimates, both sales and
PBT were broadly in line with. Positives coming through from the opex line were
offset by negative surprises on the other income and net finance expense lines.
On an annualised basis, Q1 PBT is tracking behind of consensus’ N8.7bn
estimate. Therefore, we expect downward adjustments to consensus estimates. We
however expect a neutral-to-slightly negative reaction by the market because of
base effects making the y/y trend appear weaker that it would have normally.
Total shares have shed -3.2% ytd compared
with the ASI’s +6.6% gain.
We rate the stock
Neutral. Our estimates are under review.
Total Nigeria Q1 2018 results vs. FBNQuest Capital
Research estimates (N millions)
1. Total Nigeria Q4
2017 Results Review - Neutral Rating Maintained
Total Nigeria Plc - Policy Shift Key to Full Recovery
Total Nigeria Plc - Fairly resilient earnings for a tough
TOTAL Declares N8.01bn PAT in 2017 Audited Results,
Proposes N14.00per share Dividend (SP:N228.00k)
TOTAL Declares N5.96 bn PAT in Q3 2017 Result, Proposes N3
per share Interim Dividend (SP:N245.00k)
Total Nigeria Plc - Allegation of Indebtedness
TOTAL Declares N4.61 bn PAT in Q2 2017
8. Total Nigeria
Plc - Moving from Underperform to Neutral Rating
N14.80billion PAT in 2016 Audited result,(SP:N280.00k)
10. Total Nigeria
Plc Issues Notice of Board Meeting