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26/09/2021
Posted 2 months ago

Total Nigeria Plc Announces N4.00 Half Year Interim Dividend, On Positive Earnings

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Coy: TOTAL NIG. PLC. (TOTAL)
Rating: Hold
Current Market Price: N168.00

Latest Interim Dividend: N4.00
Year High: N168.00
Year Low: N130.00
Fair Value: N110.68
By: Jeariogbe Tunde Segun (Equity Analyst)

Introduction/ Key Financials

  • In this report, we have observed the half year financial statistics of Total Nig Plc for the period ended 30th June, 2021, compare same with the figures released in corresponding quarter of 2020 for proper growth analysis
  • Meanwhile, for projections and valuations analysis, we explored the full year financial numbers. Please understand that, despite the improvement observed in the Oil & Gas sector of the economy, we have remained conservative in our approach
  • Please understand that, as against the negative earnings reported at the end of 2020 half year business session, the management of Total Oil reported an impressive positive numbers as shown below
  • In our opinion, performance is chiefly enhanced by various improvement recently recorded in the sector in recent times
  • Attracting investors’ confidence is the half year interim dividend reported at the end of the quarter.
  • Kindly see below for details
TOTAL NIGERIA
BourseNigerian Stock Exchange
Code NameTOTAL
SectorOIL AND GAS
Market ClassificationMAIN BOARD
Nature of BusinessMARKETING OF PETROLEUM PRODUCTS
Date of IncorporationJan-06-1956
Date ListedJan-01-1970
End of Accounting Year31ST DECEMBER
Websitewww.total.com.ng
RegistrarCardinalStone Registrars Limited
AuditorKPMG Professional Services
Share [email protected] (N)                                                     168.00
Earnings per Share                                                       23.76
Intrinsic Value(N)                                                       110.68
Share Outstanding339,522,286
Market Capitalisation                                       57,039,744,048

Company figures

  • The management of Total Nig. Plc achieved 41.82% growth in its Revenue within the two periods compared in this report. The current Turnover stood at N151.33 billion as against N106.70 billion in the corresponding quarter
  • Cost of Sales appreciated by 33.43% to stand at N125.82 billion compared to the N94.30 billion reported at the end of 2020 half year business session
  • Operating Profit on the other hand is estimated to worth N12.52 billion as against Oprating Loss of N716.81 million posted in the corresponding quarter of 2020
  • Operating Expenses builds up by 11.78% at the current N15.38 billion compared to N13.76 billion in the corresponding quarter
  • A total of N842.01 million was reported as Finance Cost through the six (6) months reported, this is far below the N1.95 billion used in similar period of 2020
  • Profit before Tax turned positive at N11.77 billion as against loos before tax of N796.92 million in 2020 half year result
  • Having made allowance for the income tax for the period, the management of Total Nig. reported N8.06 billion as the Profit for the period, this is against the Loss after Tax of N537.18 million made at the end of the first six (6) months in 2020
TOTAL NIGERIA-H1 2021
Statement of Comprehensive Income
 2021(000)2020(000)%CHG
Turnover151,333,238106,704,94441.82
Cost of Sales125,829,55194,304,87833.43
Operating Profit12,525,969716,8121,847.46
OPEX15,383,90713,762,14111.78
DEPRECIATION3,384,8903,071,83310.19
AMORTISATION22,2665,570299.75
FINANCE COST842,0101,954,67156.92
NET FINANCE INCOME747,403192,913487.43
PBT11,778,566796,9201,578.01
TAX3,712,976259,7321,329.54
PAT8,065,590537,1881,601.45
TOTAL COMP INCOME8,065,590537,1881,601.45
Statement of Financial Position
Current Assets142,109,46680,893,34475.68
Non Current Assets44,793,82545,289,594-1.09
Total Assets186,903,291126,182,93848.12
Current Liabilities148,461,64095,761,71155.03
Non Current Liabilities5,620,4754,914,36814.37
Total Liabilities154,082,115100,676,07953.05
Net Assets32,821,17625,506,85928.68
Retained Earnings32,651,41525,337,09828.87
Shares Outstanding339,522339,522 
  • Total Nig. Current Assets builds above corresponding period by 75.68%, as it is currently valued at N142.10 billion against N80.89 billion
  • Non-Current Assets dipped by marginal 1.09% to stand at N44.79 billion as against the 2020 half year value of N45.28 billion
  • Current Liabilities on the other hand grew by 55.03% from the previously reported N95.76 billion to N148.46 billion
  • Non-Current Liabilities appreciated to N5.62 billion same as 14.37% above the previously reported N4.91 billion
  • On the strength of the above, the estimated Net Assets is N32.82 billion this is 28.68% above the N25.50 billion estimate in the similar period of 2020
  • Retained Earnings equally builds by 28.87%, as it is currently valued for N32.65 billion against N25.33 billion in the corresponding quarter

Interim Dividend Details

  • As noted above, the management of Total Nig. Plc announced a total of N4.00 interim cash dividend at the end of the half year business session. Please note that no dividend was paid in the corresponding period
  • The said dividend is same as 16.68% of the Total earnings reported at the end of the period
  • While it yielded 2.38% of the price of Total Nig share price on the floor of the exchange as at the time the result was made available to the investing public
  • According to the document made available to the investing public through the exchange, the closure date for the dividend is slated between 16th – 20th August, 2021
  • While the qualification date is 13th August and payment date is 13th September, 2021
INTERIM DIVIDEND INFORMATION
Tickers20212020%Chg
Total Dividend                                       4.00                                        –  #DIV/0!
Payout Ratio16.84%0.00%#DIV/0!
Dividend Yield2.38%0.00%#DIV/0!
Sustainable Growth Rate20.44%-2.11%1,070.37

Financial Strength/Solvency Ratios

  • Total Nig. Plc’s Debt Ratio is estimated at 82.44%, this is 3.33% difference from the 79.79% estimated from 2020 half year earnings numbers
  • Nevertheless, Total Debt stated at the end of the period is same as 469.46% of the Equity Ratio. This is same as 18.94% higher than 2020 estimate. Please understand that it also implies that more debt were used in servicing the company’s Assets through the period as against Equity
  • We also estimated Equity Ratio which shows that Net Assets through the Period is same as 17.56% of the Total Asset of the company, this is lower than the 20.21% estimated in 2020.
  • With our Beta estimate of 0.53x on Total Nig. Plc shares on the floor of the exchange, one can safely conclude that the shares of Total enjoyed less patronage on the floor of the exchange, in our opinion, this is strictly due to the high price and the shareholding structure
Financial Strength/Solvency Ratio
TICKERS20212020%CHG
Debt Ratio82.44%79.79%3.33
Total Debt to Equity Ratio (MRQ)469.46%394.70%18.94
Equity Ratio17.56%20.21%-13.13
TICKERS2021Industrial Average%CHG
Beta Value                                       0.53                                   0.71-25.35

Profitability Ratios

  • EBITDA margin estimated for the period stood at 8.28%, this is an outstanding growth over the negative margin posted in the comparable period
  • In the same trend Pre-tax Margin stood at positive 7.78%
  • Effective Tax Rate varied largely due to the Loss position recorded in the corresponding period. Since the company accounts for the Tax Expenses against the loss position posted
  • Cost of Sales ratio remained stable between the two periods compared, please note that the ratio only deviated by marginal 5.92%
  • Return on Equity is currently estimated at 24.57% as against Loss on Equity of the corresponding quarter
PROFITABILITY RATIOS
TICKERS20212020%CHG
EBITDA MARGIN8.28%-0.67%1,332.13
PRE-TAX MARGIN7.78%-0.75%1,142.14
EFFECTIVE TAX RATE46.03%-48.35%195.21
CS TO TO83.15%88.38%-5.92
ROE24.57%-2.11%1,266.84
ROA4.32%-0.43%1,113.66

Efficiency Ratios

  • Measuring management efficiency we have tested few efficiency ratios as shown beloww,
  • Operating Expenses to Turnover Ratio was confirmed to stand at 10.17%, same as 21.18% efficiency improvement from the previous estimate of 12.90%
  • Turnover to Total Assets was also considered. Thus, the company achieved a 4.25% drop in management efficiency having moved from 84.56% to N80.97%
  • See below for other efficiency ratios considered
EFFICIENCY RATIOS
 20212020%Chg
OPEX TO TO10.17%12.90%-21.18
TO TO TA80.97%84.56%-4.25
Working Capital Turnover                                  (23.82)                                 (7.18)231.96
Working Capital Ratio                                       0.96                                   0.8413.32

Investment/Valuation Ratios

  • Compared to last half year, the management of Total Nig. Plc earned N23.76 per unit shares, this is an outstanding growth over the Loss after Tax of the corresponding quarter
  • Our half year adjusted PE/Ratio stood at an impressive point of 7.07x
  • The half year earnings is estimated to have yielded 14.14% of the price of Total Nig. Plc on the floor of the exchange as at the time the result was made available to the investing public
  • Presently, the estimated half year Book Value of Total Nig. Plc/per share stood at N96.67, same as 28.68% growth from the N75.13 of last  half year. Please note that the Book Value stood far below both the current market price and our fair value for Total Nig. Plc
  • Confirming the above position is the estimated Price to Book Value that stood above unity.
  • See below table for details
Investment/Valuation Ratios
Tickers20212020%Chg
Price at Released168.0097.5072.31
EPS23.76-1.581,601.45
TCIP/SHARE23.76-1.581,601.45
P/E-Ratio7.07-61.62111.48
Earnings Yield14.14%-1.62%971.38
BV/Share96.6775.1328.68
PBV1.741.3033.91

Valuation

As noted above, having considered the financial stand of Total Nig. Plc, with conservative projections and good consideration of visible risk elements, we have fairly price each units of Total Plc share price at N110.68. Meanwhile, considering the improved aura currently surrounding the sector, we have rated it a Hold..

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