TotalEnergies Nigeria returns to N8.02 billion pre-tax profit, misses Q3 profit forecast

TotalEnergies Marketing Nigeria Plc returned to profitability in the nine months ended September 30, 2026, reporting a pre-tax profit of N8.02 billion against a loss of N11.92 billion in the corresponding period of 2025, as finance costs declined by 40.13%.

However, its standalone third-quarter pre-tax profit of N1.31 billion was approximately half the N2.62 billion forecast, despite revenue exceeding management’s projection.

The company’s unaudited third-quarter financial statements filed with the Nigerian Exchange (NGX) on Friday, October 23, showed revenue rising by 12.65% to N661.92 billion from N587.59 billion.

Profit after tax also improved to N5.84 billion from a loss of N14.10 billion, supported by higher petroleum product sales, stronger operating earnings and reduced financing expenses.

Fuel sales drive earnings recovery:

TotalEnergies recorded gross profit of N78.52 billion in the nine-month period, representing a 19.42% increase from N65.76 billion a year earlier.

• Operating profit also rose by 238.89% to N19.16 billion from N5.65 billion.
• White petroleum products accounted for almost all the revenue growth, contributing approximately N71.20 billion, or 96%, of the N74.33 billion increase in total sales.
• Revenue from white petroleum products rose by 17.74% to N472.66 billion.
• Lubricants and other products recorded a 1.68% increase to N189.26 billion.
• Network revenue increased by 16.82% to N370.67 billion, while General Trade revenue rose by 19.09% to N244.91 billion.
• Cost of sales increased by 11.80% to N583.39 billion, below the 12.65% growth in revenue.
• The slower increase in cost of sales helped lift gross margin to 11.86% from 11.19% in the corresponding period.

Administrative expenses also declined by 1.09% to N59.56 billion, providing additional support for operating profitability.

Despite the improvement, the company’s net profit margin remained below 1%, reflecting the continued pressure of operating and financing costs on earnings.

Lower Finance Costs boost profit:

A significant contributor to TotalEnergies’ earnings recovery was the reduction in finance costs, which fell by 40.13% to N12.30 billion from N20.55 billion in the corresponding period of 2025.

• Interest on bank overdrafts declined by 43.26% to N11.58 billion, accounting for approximately 94% of the company’s total finance costs.
• Earnings per share improved to N17.21 from a loss of N41.54 per share.
• Third-quarter revenue increased by 33.13% to N217.92 billion.
• Third-quarter operating profit reached N4.64 billion, compared with an operating loss of N4.66 billion a year earlier.
• Profit after tax for the third quarter was N894.19 million, against a loss of N11.25 billion in the corresponding quarter of 2025.
• Third-quarter pre-tax profit stood at N1.31 billion, reversing the N10.23 billion loss recorded a year earlier.

Nairametrics previously reported that TotalEnergies recorded a full-year after-tax loss of approximately N17.18 billion in 2025, compared with a profit of N27.40 billion in 2024 before returning to profitability in the first half of 2026 with N4.95 billion in after-tax earnings on revenue of N443.99 billion.

Nevertheless, its N12.30 billion finance bill still represented approximately 64% of operating profit and exceeded the N8.02 billion recorded as pre-tax profit.

TotalEnergies working capital deficit narrows:

TotalEnergies reduced its negative net working capital position to N11.06 billion as of September 30, 2026, compared with a deficit of N20.15 billion at the end of December 2025. However, current liabilities continued to exceed current assets despite the improvement.

• Total current assets increased by 12.36% to N349.04 billion from N310.64 billion, while current liabilities rose by 8.86% to N360.10 billion from N330.79 billion.
• Bank overdrafts declined by 30.02% to N59.26 billion, while total borrowings fell by 3.44% to N81.76 billion.
• The company disclosed a new N22.50 billion short-term intercompany loan denominated in dollars and carrying a variable interest rate.
• Current trade and other receivables increased by 27.52% to N165.23 billion, while trade and other payables rose by 14.32% to N270.40 billion.
• Operating cash flow increased by 66.72% to N38.27 billion, supported partly by higher payables and lower tax payments.
• Other creditors increased from N5.47 billion to N63.47 billion, although the statements did not provide a detailed breakdown of the increase.
• Shareholders’ equity also increased by 12.29% to N53.38 billion.

Cash balances rose by 25.18% to N56.06 billion, including N34 billion held with TotalEnergies Treasury, but remained approximately N3.20 billion below outstanding bank overdrafts.

Market reaction:

The market is yet to react to the results announcement as the share price closed flat at N518.40 per share on Friday, October 23.

• Total began the year with a share price of N640.00 but has since lost 19% off that price valuation, ranking it 112th on the Nigerian Exchange (NGX) in terms of year-to-date performance.
• Shareholders’ worries are compounded by the fact that TOTAL has lost 10% of the stock’s value from September 24th to date.
• However, the market may reprice the stock on the strength of the earnings recovery.

Although higher fuel sales and lower finance costs supported the earnings recovery, collecting outstanding receivables, managing the dollar-denominated loan and addressing the increase in other creditors remain important financial considerations.