By Cowry Asset
In 2016, Total Oil Nigeria Plc recorded an impressive year-on-year financial performance, beating industry peers despite economic headwinds – an economic recession, scarce foreign exchange and rising inflation.
Turnover increased by 38.24% to N290.95 billion while profit after tax spiked by 319.91% to N14.79 billion. In comparison to industry performance, the oil and gas major recorded above average profitability while financial leverage fell below industry average. Return on Equity increased to 74.33% in 2016 (from 25.16% in 2015), higher than industry average of 26.02%; while Debt to capital fell to 28.12% in 2016 (from 45.55 in Q3 2015), better than industry average of 31.59%.
In the period under review, its shares were also cheaper than industry averages going by price multiples – EV/EBITDA was 3.17x compared to industry average of 5.63x while weighted PER was 1.79x compared to industry average of 12.14x. We assign a BUY rating to TOTAL as it trades at a 48.98% discount to its fair value of N515.45.
Source: Cowry Asset
Adedapo Adesanya