MRS Oil Nigeria Plc reported a pre-tax profit of N3.411 billion for Q2 2024, showing a significant 190.96% increase compared to the same period last year.
The company’s Q2 2024 financial statements reveal impressive revenue growth, with N82.813 billion recorded, a 186.94% increase from N28.880 billion in Q2 2023, and a 4.62% rise from Q1 2024.
For the first half of 2024, MRS Oil achieved a total revenue of N161.973 billion, exceeding 80% of the company’s total revenue for the entire year of 2023. Key figures for Q2 2024 compared to Q2 2023 include:
- Revenue: N82.813 billion, up 186.94% YoY
- Cost of sales: N76.265 billion, up 220.96% YoY
- Gross profit: N6.548 billion, up 28.42% YoY
- Impairment loss on financial assets: N962 million, up 92.61% YoY
- Admin/Selling & Distribution Expenses: N2.300 billion, up 91.87% YoY
- Net Foreign exchange loss: N209 million, down 90.81% YoY
- Operating profit: N3.351 billion, up 187.00% YoY
- Net Finance income: N59.61 million, up 1,196% YoY
- Profit after tax: N2.228 billion, up 166.70% YoY
- Earnings per share: N6.50, up 166.39% YoY
- Total Assets: N65.083 billion, up 18.70%
The company’s revenue from premium motor spirit (PMS) remains a major driver, constituting over 80% of the total revenue. Despite the revenue increase, the rising cost of sales, which increased by 220.96% YoY to N76.265 billion, has outpaced revenue growth. This resulted in a moderated gross profit growth and a shrinking gross profit margin, which fell by 55.25% YoY to 7.91%.
The high costs indicate the need for effective cost management to maintain profit margins and overall financial performance. Despite these challenges, MRS Oil performed better in Q2 2024 compared to Q1 2024 across key performance indicators.
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Looking ahead, the company has set an ambitious revenue forecast of N170.340 billion for Q3 2024, which surpasses the half-year 2024 actual revenue by more than 5%. However, they have projected increased costs of sales and overheads, resulting in a moderate pre-tax profit forecast of N1.08 billion for Q3, which is lower than previous quarters.
Considering the strong performance in the first half of 2024 and the cautious Q3 forecast, it is likely that MRS Oil Nigeria Plc will surpass its full-year 2023 pre-tax profit. This potential for improved financial performance can enhance investor confidence and attract more investment.
So far this year, MRS Oil’s share price has gained 26.33%, though this is lower compared to the 644.65% year-to-date gain in 2023.