Total Nigeria Plc Recommends Final Dividend of N7 as Profit Hits N147bn

Total Nigeria Plc thursday recommended a final dividend of N7.00 per share for the year ended December 31, 2016, bringing total dividend to N17.00 per share. The company had paid an interim dividend of N10.00 per share before now.

The final dividend, which amount to N2.377 billion would be paid out of a profit after tax of N14.769 billion recorded for the year, indicating a jump of265.6 per cent over the N4.1 billion posted in 2015.

In the audited results of the made available by the Nigerian Stock Exchange (NSE), Total Nigeria Plc posted revenue of N290.9 billion in 2016, showing an increase of 40 per cent from N208 billion in 2015.

Cost of sale rose from N183 billion to N241 billion, making gross profit to stand at N49.1 billion, up from N24.7 billion.

Finance costs moderated at N852 million, down from N1.790 billion in 2015. Consequently, profit before tax improved by 213 per cent to N20.35 billion, from N6.49 billion, while profit after tax (PAT) soared by 265 per cent to N14.7 billion, from N4.1 billion. Directors have therefore recommended a final dividend of N7.00 per share.
The market reacted negatively to the results as the shares fell by 5.4 per cent to close lower at N274.55 each.

Analysts at FBN Quest said the final dividend recommended by Total Nigeria was below market consensus.

“Total declared a final dividend of N7.00 (total dividend of N17.00) which is rather disappointing given the strong earnings growth recorded. This works out to a dividend payout of just 39 per cent, the lowest in over two decades. We forecasted a final dividend of N26.00 (consensus N19.00). Year to date, Total shares have declined 6.0 per cent, broadly in line with Nigerian Stock Exchange (NSE) All-Share Index ( ASI). We rate the stock underperform,” the FBN Quest said.

According to them, sequentially, while sales and PBT declined by six per cent quarter-on-quarter (q/q) and 18 per cent q/q, PAT was up 17 per cent year-on-year(y/y) on the back of a lower tax rate.
The analysts said gains from Total’s foreign exchange (fx) supply agreement with Total Upstream, a related company, were realised yet again.

“Given that the independent marketers struggled to source fx for imports during the period, we suspect that major marketers, especially firms with related exploration & production entities, continue to gain market share. The situation also provides Total with some level of pricing flexibility, especially within the corporate segment where gross margin expanded the most,” they said.