TotalEnergies Marketing Nigeria Plc has set its sights on a projected profit after tax of N543 million for the third quarter ending September 30, 2025. This optimistic outlook comes in spite of significant finance costs that are anticipated to affect the company’s overall profitability.
Revenue and Profit Expectations
For this upcoming quarter, TotalEnergies forecasts revenue reaching N177.1 billion. The estimated cost of sales stands at N150.6 billion, which would yield a gross profit of N26.5 billion. In terms of operational performance, the company expects an operating profit of N7.7 billion. This figure takes into account selling and distribution costs of N3.6 billion, along with administrative expenses amounting to N17.1 billion.
Impact of Finance Costs
However, the company’s financial outlook is tempered by substantial finance costs. Interest expenses are projected to hit N7.2 billion, significantly overshadowing the expected finance income of N933 million. Consequently, TotalEnergies anticipates a net finance cost of N6.3 billion, which will weigh heavily on the company’s profit margins. Before tax, the company estimates a profit of N1.4 billion, with an income tax expense projected at N886 million.
Cash Flow Projections
On the cash flow side, TotalEnergies expects to generate net cash from operating activities amounting to N19.1 billion. This positive cash flow is expected to be bolstered by cash receipts from customers totaling N159.4 billion, while cash payments to suppliers and employees are anticipated to be around N135.5 billion.
Investing Activities
Investment activities are predicted to result in a net cash outflow of N1.6 billion. This outflow is primarily attributed to expenditures for purchasing fixed assets, as well as some anticipated proceeds from the sale of property, plant, and equipment.
Financing Activities
In terms of financing activities, a more substantial net cash outflow of N27.1 billion is expected. This outflow will primarily stem from interest payments on overdrafts, which are forecasted to reach N7.2 billion. Additionally, the repayment of borrowings is projected to total N17.3 billion, while dividend payments are estimated at N2.6 billion.
Cash Balance Outlook
As a result of these financial activities, TotalEnergies anticipates a net decrease in cash and cash equivalents amounting to N9.7 billion for the quarter. This decline will bring the projected balance of cash and cash equivalents to a negative N155.5 billion by the end of September 2025.
The financial forecasts have been outlined by Seye Samba, the Executive Director of TotalEnergies Marketing Nigeria Plc. Despite the challenges posed by finance costs, the company’s ability to generate revenue and manage cash flows will be critical to navigating the upcoming quarter successfully.
In summary, while TotalEnergies shows an optimistic profit projection amidst significant financial burdens, the company must strategically manage its operations and finances to achieve its goals. The upcoming quarter will be a critical phase for TotalEnergies as it strives to balance profitability with the rising costs that threaten its financial health.
