Shareholders urge government to improve downstream oil sector efficiency
Shareholders of Total Plc have stressed the need for the government to improve the efficiency of the downstream oil sector by reviewing its policies and regulations to grow the companies and attract more investment.
The shareholders, who spoke at the company’s 42nd Annual General Meeting (AGM), held in Lagos, said despite the claims that deregulation has commenced, the sector has not recorded any significant improvement as regards Premium Motor Spirit (PMS), also known as petrol importation.
Besides, the shareholders at the meeting approved the payment of N2.278 billion as a total dividend for the 2019 financial year.
The shareholders commended the company’s board and management for being resilient in the face of the challenging operating environment and appreciated the dividend payment, which was coming at the right time in view of current economic realities.
The total dividend translates to a dividend per share of N6.71 per share for the year ended December 31, 2019.
Specifically, a former General Secretary, Independent Shareholders Association, Adebayo Adeleke, decried the Federal Government’ deregulation of the downstream sector, saying the government is still the sole importer of PMS in Nigeria.
According to him, the government still fixes the price of the commodity and determines prices it sells to depot owners, which are a disincentive to investment and an impediment to economic growth and development of the country.
“They should allow market forces to determine so that we can attract investment into this country. You cannot be a monopoly in the importation and say you are deregulating. There is no level playing ground.”
Reviewing its performance, the Chairman of Total, Stanislas Mittelman, said the company has maintained to be a brand and leading energy solutions provider.
He said that 2019 was a difficult year for the nation, and an extremely challenging year for the company, leading to a five per cent fall in its turnover from N308 billion in 2018 to N292 billion.
According to Mittelman, the cost of doing business rose exponentially hence profit after tax decreased by 71 per cent from N7.96 billion to N2.28 billion. Interest expense was N6.7 billion, which was over 395 per cent higher than the previous year’s mainly due to the prepayment for products and a high level of borrowing.
On the company’s outlook, the chairman said: “With the objective of making significant savings on both operational and capital expenditure costs we have put in place a series of initiatives relating to cost efficiency, process optimization, significant reduction of working capital requirement and cost of financing, which are already operational in 2020.
“We also plan to commence importation of PMS as soon as there is clarity on the regulatory framework and equal access to foreign exchange for all importers.”
He said further that “Notwithstanding the recovery efforts and strategies put into place by the Company as the COVlD-19 pandemic increased its foothold across the globe, Total Nigeria put in a place a business continuity plan that has enabled it to continue to deliver products and services as best as it possibly could.”
He also noted that like the rest of the world, Total has been severely impacted by COVlD-19, which has given rise to unforeseeable consequences across all facets of human activities and with a long-term impact, saying that like most businesses, Total Nigeria is in an even more difficult situation than was previously described.
He added that the full effects are yet to be ascertained or even forecasted, saying that “However, Total Nigeria has always been a trailblazer and market leader in the downstream sector of the Nigerian oil and gas industry, as we intend to remain same by improving our supply and distribution networks whilst maintaining an unflinching commitment to ethical standards.”