MRS Oil Nigeria Plc’s 2024 Financial Performance: A Story of Growth and Resilience Amidst Economic Headwinds
MRS Oil Nigeria Plc’s audited financial statements for the year ended December 31, 2024, paint a picture of robust growth and enhanced profitability, despite navigating a turbulent economic landscape marked by significant foreign exchange fluctuations. The company demonstrated resilience and operational efficiency, achieving substantial increases in revenue and profit while strategically managing its assets and liabilities.
The company’s revenue surged by an impressive 71.3% to reach N312.23 billion in 2024, compared to N182.31 billion in 2023. This remarkable growth can be attributed to a number of factors, including increased sales volumes, favorable market conditions, and the company’s strategic initiatives to expand its market share. The rise in revenue was accompanied by a corresponding increase in the cost of sales, which rose to N288.31 billion from N167.31 billion in the previous year. However, the company effectively managed its cost structure, resulting in a 59.5% increase in gross profit, reaching N23.92 billion compared to N15 billion in 2023. This underscores the company’s ability to maintain a healthy profit margin despite the challenging economic environment.
The company’s bottom line also witnessed significant improvement, with profit after tax soaring by 59.5% to N6.51 billion in 2024, up from N4.05 billion in 2023. This impressive growth in profitability can be attributed to several factors, including higher sales volumes, improved operational efficiency, and effective cost management strategies. Furthermore, the company reversed its net finance cost from N13.65 million in 2023 to a net finance income of N130.09 million in 2024, further contributing to the overall profitability. This demonstrates the company’s ability to leverage its financial resources effectively and generate positive returns.
Despite the positive performance, MRS Oil Nigeria Plc faced significant headwinds in the form of foreign exchange losses. The company reported a foreign exchange loss of N1.29 billion, reflecting the impact of currency fluctuations on its operations. A breakdown of the foreign exchange loss reveals a loss of N1.46 billion on vendor balances, partially offset by a gain of N209.6 million on customer balances. This highlights the challenges posed by a volatile exchange rate environment and underscores the importance of effective forex risk management strategies.
The company’s balance sheet reflects significant growth in assets and liabilities, indicating expansion and increased operational activity. Total assets nearly doubled, rising from N54.83 billion in 2023 to N105.43 billion in 2024. This substantial increase is primarily driven by growth in inventories, trade receivables, and cash reserves. Inventories jumped to N25.74 billion from N7.63 billion, trade receivables increased to N26.81 billion from N20.75 billion, and cash and cash equivalents rose to N18.48 billion from N5.91 billion. This growth in assets reflects the company’s investment in its operations and its ability to generate cash flow.
On the liabilities side, total obligations surged to N77.11 billion from N32.22 billion in 2023, largely due to an increase in trade payables, which rose to N66.22 billion from N21.73 billion. This increase in trade payables is likely associated with the higher procurement of inventories to support the increased sales volume. The company’s tax expense also rose significantly to N3.27 billion, compared to N1.94 billion in 2023, reflecting the higher profitability. MRS Oil also demonstrated its commitment to shareholders by declaring a dividend of N809.2 million at N2.36 per share.
Looking ahead, MRS Oil Nigeria Plc has projected a revenue of N129.36 billion for the first quarter of 2025. This forecast suggests continued growth, although at a moderated pace compared to the substantial increase witnessed in 2024. The company’s ability to achieve this projection will depend on various factors, including market conditions, economic stability, and the effectiveness of its operational strategies. The company’s relationship with MRS Oil and Gas Limited, a related entity, also plays a significant role in its operations. In 2024, MRS Oil and Gas Limited stored products worth N1.5 billion for the company, compared to N935.70 million in the previous year. Transactions with this related entity amounted to N44.73 billion in 2024, significantly higher than the N10.7 billion recorded in 2023. This suggests an increasing reliance on this related entity for storage and other operational needs.
