Eterna’s Improving Fundamentals Lift Profit

Eterna Plc surpassed five-year profit generation and migrated from 2021 audited financial year loss to impressive performance in its unaudited financial statement for year ended December 31, 2022.

The impressive 2022 unaudited results came on the backdrop of a significant increase in revenue and a drop in finance cost as the group declared N2.42 billion profit before tax from loss before tax in 2021 and N1.77billion profit after tax in 2022 from N1.1billion loss reported in 2021.

Eterna had posted over N2billion profit in 2017 and till 2021, it announced mixed performances that impacted on its dividend payout to shareholders and stock price appreciation.  

The petroleum marketing company in the year under review reported an increase in revenue to N117.46 billion, representing an increase of 43per cent from N82.2billion in 2021.

The group benefited from the increasing demand for petroleum products as foreign and domestic business activities expanded in 2022.

The average retail price paid by consumers for Premium Motor Spirit (Petrol) for December 2022 was N206.19 per litre, indicating a 24.38er cent increase when compared to N165.77 recorded in December 2021, according to National Bureau of Statistics (NBS) report.

The average retail price of Automotive Gas Oil (Diesel) paid by consumers in December 2022 was N817.86 per litre, an increase of 182.64per cent from N289.37 per litre recorded in the corresponding month of the previous year, NBS latest report had revealed.

However, the group’s revenue breakdown revealed that Fuel generated N97.277billion in 2022, an increase of 51 per cent from N64.49billion in 2021, while revenue from lubricant rise to N15.51billion in 2022, representing an increase of 1.44 per cent from N15.29billion in 2021.

In addition, revenue from “Trading” dropped by 83 per cent to N183million in 2022 from N1.08billion inn 2021 as “Others” revenue rose significantly by 233 per cent to N4.5billion from N1.35billion reported in 2021.

In terms of cost of sales, Eterna reported N108.34 billion in 2022 unaudited results as against N77.93billlion in 2021 audited result and accounts, brining CoS/Revenue to 92.24per cent in 2022 from 94.8per cent in 2021.

As inflation rate closed the year under review at per cent, the group show its materials cost moving to N107.01 billion in 2022 from N77.05 billion reported in 2021 as Delivery cost rose significantly by 50.06per cent to N1.33 billion in 2022 from N885.46 million in 2021.

The interplay between revenue and cost of sales boosted gross profit to N9.12billioni in 2022 from N4.26billion in 2021 as gross profit margin increased to per cent in 2022 from per cent in 2021.

Despite double-digit inflation rate, the management in the year under review was prudential in managing operating expenses.

The group’s total operating expenses moved to N6.15billion in 2022, representing an increase of 38 per cent from N4.47billion reported in 2021.

The increase in total operating expenses was driven by 20.1 per cent increase in Selling and distribution expenses to N283million in 2022 from N235.66million in 2021 as General and administrative expenses hits NN5.87billion in 2022 from N4.23billion reported in 2021.

The group also announced N250.3million non-core business income in 2022 from N231.63million in 2021, fuelled by rental income.

Furthermore, the group reported N41.05billion interest income on short-term bank deposits in 2022 from N9.09billion in 2021 and reported N1150.65million foreign exchange loss in 2022 from N210.01million foreign exchange gain in 2022.

Eterna also reported N690.67million finance cost in 2022, representing a decline of 51.6per cent from N1.18billion in 2022.

Key contributing factor to decline on finance cost was 52 per cent drop in interest on loan to N491.5million in the year under review from N1.02billion reported in corresponding year.

On the growth in profit, the Group closed 2022 with N1.36 Earnings Per Share (EPS) as against N0.84 loss in 2021 financial year.   

Balance sheets emerges stronger amid increasing borrowing

The balance sheet of Eterna in 2022 unaudited financial statement showed stronger assets despite growing short-term borrowing.

The group’s total assets increased to N54.27 billion in 2022 from N46.08billion in 2021, representing an increase of 17.77 per cent. As non-current assets dropped to N14.97billion in 2022 from N15.16billion in 2021 as current assets grew by 27.1 per cent to N39.3billion in 2022 from N30.93billion in 2021.

The group announced N40.38billion total liabilities in 2022 from N33.96billion in 2021. This means that Eterna total liabilities proportion to total assets moved to 74.4per cent in 2022 from 73.7per cent in 2021.

In addition to balance sheet position, Eterna reported drop in non-current liabilities to N1.27billlion in 2022 from N2.33billion in 2021 as current liabilities increased to N39.1billion in 2022, representing an increase of 24 per cent from N31.63billion in reported 2021.

However, total equity increased to N13.89billion in 2022 from N12.12billion reported in 2021.

Remark.

While commenting on the group third quarter ended September 30, 2022 performance, the Managing Director/Chief Executive Officer of Eterna, Mr Benjamin Nwaezeigwe had said the growth trajectory was on the back of increased operating activities, improved efficiency, staff dedication and a new energy in the organisation brought about by the vision of the new leadership.

According to him, the company is still committed to actualize its goal to be Africa’s preferred Energy Company while providing efficient energy solutions.

“We will continue to focus on delivering value to our shareholders as we continue to drive the growth and profitability of our business,” he stated

He noted that the company would actively continue to play across the energy value chain covering the production, transportation, and distribution of energy solutions vital for economic growth and development.