TotalEnergies Marketing Nigeria Plc has warned that its third-quarter profit is expected to plunge by over 60%, weighed down by escalating finance costs and shrinking revenues.
The company’s profit for the quarter ending September 2025 is projected at ₦543 million, down sharply from ₦1.41 billion recorded in the previous quarter.
Despite a marginal increase in gross profit, earnings have come under intense pressure from rising operational and financing expenses. TotalEnergies Nigeria is projecting a 7.6% fall in revenue for Q3, from ₦191.6 billion to ₦177.1 billion. The cost of sales decreased slightly, but the relief was overshadowed by surging administrative and finance costs.
“The company is navigating a challenging macro environment characterised by FX volatility, tight liquidity, and rising borrowing costs,” said Shola Ajayi, a Lagos-based energy analyst. “This is reflected in its deteriorating financial position and shrinking cash reserves.”
The company’s finance expenses rose from ₦6.48 billion in Q2 to ₦7.24 billion in Q3—a 12% increase—despite repaying ₦17.27 billion in borrowings. Heavy reliance on short-term loans such as overdrafts continues to drive up interest payments. Consequently, net finance costs jumped to ₦6.31 billion, dragging profit before tax to ₦1.43 billion, a 33% quarterly decline.
Administrative costs also spiked by 9%, rising from ₦15.62 billion to ₦17.08 billion, while selling and distribution expenses dropped slightly to ₦3.62 billion. Although operating profit held relatively steady at ₦7.74 billion, down marginally from ₦7.76 billion, this was not enough to offset the losses further down the income statement.
Cash flow metrics also highlight liquidity stress. Although operating cash flow improved slightly to ₦19.06 billion in Q3, the company faced a financing outflow of ₦27.13 billion, largely due to debt servicing and interest payments.
As a result, cash and cash equivalents slipped deeper into negative territory, reaching -₦155.5 billion by the end of Q3, from -₦145.8 billion at the end of Q2. Analysts warn this could hinder the company’s ability to invest, refinance, or pay dividends unless the situation improves.
“Sustained negative cash positions raise red flags, especially in a rising interest rate environment where rollover costs are high,” noted Chuka Umeh, another energy analyst. “It puts pressure on working capital and could affect future profitability.”
The downstream oil sector in Nigeria remains under stress due to subsidy removal, currency devaluation, and supply chain inefficiencies. While deregulation promised better margins, companies like TotalEnergies continue to grapple with price instability and weakened consumer demand.
Despite cost challenges, the company’s consistent operating profits indicate some resilience. However, unless revenues rebound or financing costs are brought under control, earnings may remain subdued for the rest of the year. Investors will be watching how the company responds, whether through asset restructuring, refinancing, or aggressive cost management.
At the last close, TotalEnergies Nigeria’s shares remained unchanged at ₦705, with a one-year return of 91.6%.
