14 October 2014, Lagos – MRS Oil Plc has set the plans rolling towards returning to its previous profit highs, but low profit margin is prolonging the recovery journey. At the peak of its performance in 2010, the company converted 2.5 per cent of its revenue into profit. This year, profit margin is failing to improve from 0.7 per cent with which the company closed last year’s operations, the lowest among petroleum marketers, Daily independent investigations have revealed
Mr. Paul Bissohong, the company’s Managing Director/Chief Executive Officer, has a limited space to drive the recovery process this year. His only option is to keep growing sales revenue, that was the common practice for the past two years. The revenue maximazation and development of human capacity would enable the company recover quickly there by meeting its targets in the years ahead.
Sales revenue improved marginally by 2.4 per cent to N47.16 billion year-on-year at the end of the second quarter. Revenue growth is weakened by a decline of 4.4 per cent in the sales of premium motor spirit, which accounts for about 71 per cent of the company’s turnover. Based on the second quarter growth rate, sales revenue is projected at N95.7 billion for MRS Oil in 2014.
The revenue anticipated for the year will represent an increase of 9.1 per cent over the turnover figure of N87.74 billion the company posted in 2013. This means, the company is expected to sustain revenue growth for the third year running, though growth is expected to keep decelerating from 11.5 per cent in 2012 and 10.1 per cent in 2013. Slow growth in sales revenue is the general trend in the petroleum marketing group this year.
The company grew after tax profit by 64 per cent to N315 million year-on-year at the end of the second quarter. It is expected to close the year with an after tax profit in the region of N640 million, which will be a marginal increase over the full year profit of N630 million the company reported last year. Profit growth could be stronger than projected if the accelerated growth recorded in the second half of last year is repeated this year.
The company also improved profit margin on year-on-year basis from 0.4 per cent in June last year to 0.7 per cent at the end of June this year. Profit margin is ,however, unchanged from the company’s position at the end of last year. Its profit margin is a distant lowest within the petroleum marketing sector that is led by Mobil Oil at 11.4 per cent, followed by Oando, 4.6 per cent; and Forte Oil with 3.9% at the end of the second quarter. Total closed its second quarter operations with a net profit margin of 1.8 per cent and Conoil recorded a net profit margin of 1.3 per cent during the same period.