MRS reports N3.076 billion pre-tax profit in Q1 2024
MRS Oil Nigeria Plc has reported a pre-tax profit of N3.076 billion for the Q1 ended March 31, 2024, representing 58.34% year-on-year (YoY) increase.
According to the company’s 2024 Q1 financial statements, MRS Oil reported an impressive revenue of N79.160 billion, marking 157.11% increase from the N30.788 billion reported the year prior.
Premium Motor Spirits (PMS) continues to drive the company’s revenue, accounting for 88.7% of total revenue.
Key highlights (Q1 2024 vs Q1 2023)
Revenue: N79.160 billion +157.11% YoY Cost of sales: N73.548 billion +172.63% YoY Gross profit: N5.612 billion +47.23% YoY Impairment loss on financial assets: N208 million +0.99% YoY Admin expenses: N1.937 billion +62.58% YoY Net Foreign exchange gain: N495 million +215.47% YoY Operating profit: N3.012 billion +53.26% YoY Finance cost: N32.754 million -15.88% YoY Profit after tax: N1.990 billion +34.93% YoY Earnings per share: N5.88 +34.88% YoY Commentary Revenue from Premium Motor Spirit (PMS) continues to be the major driver of total revenue, contributing 88.7% and experienced a year-on-year surge of 184%. However, despite the substantial increase in revenue from PMS it’s noteworthy that the PMS cost growth (207 YoY) outpaced its revenue growth. This suggests that while revenue increased, the costs associated with producing or acquiring PMS rose even more rapidly. This disparity between revenue growth and cost growth resulted in a notable decline in gross profit margin, down to 7.09% from 12.38% recorded in Q1 2023. This implies that although revenue increased, the profitability of each unit of PMS sold decreased due to higher costs.
Additionally, net foreign exchange losses and administrative expenses remained elevated, contributing to the overall costs.
The implication is that should costs continue to outpace revenue growth, it could potentially result in a decline in profitability in the future.
Already, the decrease in net profit margin to 2.51% in Q1 2024 from 4.79% in Q1 2023 indicates a decline in profitability.
Notwithstanding, in relative terms, the performance of MRS Oil is strong. Importantly, the company’s stock has exhibited bullish momentum, surpassing its earnings. In 2023, it achieved an impressive year-to-date gain of 645%, and this year it has seen a 28.6% year-to-date increase, ranking it as the 23rd best-performing stock on the NGX in terms of year-to-date performance.
Follow us for Breaking News and Market Intelligence.
Full Story: https://nairametrics.com/2024/04/26/mrs-reports-n3-076-billion-pre-tax-profit-in-q1-2024/
TAGS: #reports #N3.076 #billion #pretax #profit
Leave a Reply