TotalEnergies Marketing Nigeria Plc’s 2024 Financial Performance and Shareholder Concerns:
TotalEnergies Marketing Nigeria Plc concluded its 47th Annual General Meeting (AGM) with a pronounced emphasis on shareholder returns and future growth strategies. The company announced a substantial dividend payout of N13.58 billion for the 2024 financial year, marking a significant 60% increase compared to the previous year’s N25 per share. This translates to a dividend of N40 per share for shareholders, reflecting the company’s robust financial performance. However, the AGM was also marked by shareholder concerns regarding the absence of bonus share issuances since 2004, despite the company’s consistent profitability and strong financial standing. Shareholders voiced their desire for bonus shares, arguing that they would facilitate increased retail investor participation, given the escalating share prices in the open market.
Shareholder Demands and Management Responses:
Shareholder representatives, including the leader of the Independent Shareholders Association of Nigeria, Sunny Nwosu, and shareholder Anthony Omoniyi, questioned the board’s rationale for not issuing bonus shares despite the company’s impressive net earnings of N74.9 billion. They emphasized that bonus shares would provide retail investors with a more accessible means of increasing their holdings, especially considering the rising cost of shares. Furthermore, shareholders advocated for the reinstatement of interim dividend payments, particularly during festive periods, to provide financial support to low-income investors. In response, Jean-Philippe Torres, the company’s chairman, affirmed the company’s dedication to rewarding shareholders while also maintaining a crucial balance between profit distribution and reinvestment for sustainable growth. He explained that the company allocates 50% of its profit before tax to shareholders, with the remaining portion dedicated to operational expenses, maintaining profitability, and delivering long-term value.
Financial Performance and Justification for Expenditures:
Torres attributed the company’s increased costs to strategic investments in asset maintenance, publicity efforts, inflationary pressures, foreign exchange volatility, and evolving regulatory requirements. These investments were deemed essential for maintaining operational efficiency and competitiveness in the market. The company’s financial results reveal significant growth across various metrics. Revenue surged by 64% to N1.04 trillion, while profit before tax witnessed a remarkable 140% increase to N42.25 billion. Comprehensive income also registered a substantial growth of 113%, reaching N27.49 billion. This robust financial performance underscores the effectiveness of the company’s strategic investments and its ability to navigate challenging market conditions.
Addressing Unclaimed Dividends and Future Projections:
Shareholders raised concerns about the substantial amount of unclaimed dividends, totaling over N2.4 billion. They urged the company to collaborate with registrars to proactively trace and return these dividends to their rightful owners. This proactive approach aims to ensure that shareholders receive their entitled benefits and maintain trust in the company’s dividend distribution process. Looking ahead, TotalEnergies Marketing Nigeria Plc has projected a revenue of N191.61 billion for the second quarter of 2025, as indicated in its forecast of the statement of profit or loss and other comprehensive income filed with the Nigerian Exchange Limited. This projection signals the company’s continued optimism about its future performance and its ability to generate substantial revenue growth.
Balancing Shareholder Returns and Long-Term Growth:
The AGM highlighted the inherent tension between maximizing shareholder returns through dividends and bonus shares, and reinvesting profits for sustained growth and future profitability. The company’s management emphasized the importance of striking a balance between these two competing priorities. While acknowledging shareholder demands for increased returns, they underscored the necessity of reinvesting profits to ensure the company’s long-term financial health and competitiveness. This reinvestment strategy includes crucial investments in asset maintenance, publicity, and adapting to changing regulatory landscapes. These investments, while contributing to increased costs in the short term, are seen as essential for sustaining profitability and creating long-term value for shareholders.
Navigating Market Dynamics and Shareholder Expectations:
TotalEnergies Marketing Nigeria Plc faces the challenge of navigating complex market dynamics, including inflation, foreign exchange fluctuations, and regulatory changes, while also meeting the evolving expectations of its shareholders. The company’s commitment to balancing profit distribution with strategic reinvestments is crucial for navigating these challenges and ensuring sustainable growth. The AGM served as a platform for open dialogue between the management and shareholders, allowing for a transparent discussion of the company’s financial performance, future projections, and strategies for addressing shareholder concerns. This ongoing communication fosters a collaborative relationship between the company and its stakeholders, contributing to a more informed and engaged shareholder base.
