Total Nigeria Continues Poor Revenue, Profit Run In Q2 2020

Total Nigeria continues with its poor revenue and profit this year, as its second-quarter financial statements show the oil company is still struggling from keeping its earnings from declining since the beginning of this year. AllNews gathered from Total's financial statement that Q2 2020 revenue fell way below the N70.2 billion generated in the first quarter of 2020.

Total's revenue declined to N36.4 billion in the second quarter of this year, representing a significant drop when compared to the corresponding period of 2019 when the company reported N73.4 billion as revenue - this shows within three months (April to June) Total struggled to make half of both Q1 2020 and Q2 2019 revenues.

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During the second quarter of 2020, the company's cost of sales was reduced, from the N64.8 billion of the corresponding period of last year to N31.8 billion in Q2 2020, reflecting the level of production for the period. This, as expected, affected Total's gross profit for this year's Q2, as it declined to N4.6 billion, failing to surpass the N8.5 billion recorded in Q2 2019.

In the statement obtained by AllNews, Total reported a loss in its operating profit for Q2 2020, disclosing N1.6 for the period, falling below the N2.5 billion recorded in the second quarter of 2019. Meanwhile, Total reported a loss for profit before minimum and income taxation, as it reported N386.9 million for Q2 2020, after reporting N620.3 million for the corresponding period of 2019. Also, the company reported a loss for the Q2 2020 period, recording N373.9 million, while in Q2 2019, it reported N604 million.

What's Wrong With Total Nigeria?

AllNews had previously reported that Total Nigeria generates its revenue from sales of refined petroleum products, lubricants, special fluids to its customers. The company's customers are divided into three categories; Networks (which is sales to service stations), General Trade (which represents sales to corporate customers excluding customers in the aviation industry), then the last being the Aviation industry.

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The oil industry and other sectors had been severely hit by the COVID-19 pandemic since it was first recorded in Nigeria in late February 2020. The lockdown announcement by President Muhammadu Buhari led to the closure of businesses, and the Aviation industry, which is one of the sectors that are vital to the oil industry's revenue, was shut down for almost four months, thereby, significantly reducing the revenue source of Total.

Also, the oil industry was hit with low demand for their commodity, with oil prices also crashing - these are expected to have a negative impact on Total's revenue, hence the poor earnings the company has been recording since the first quarter of 2020.