Eterna Oil, a leading player in Nigeria’s oil and gas sector, has reported a loss of N181.9 million in the first quarter of 2023, in contrast to a gain of N210 million recorded in the same period of 2022. Despite this setback, the company has achieved a revenue increase of 16.25 percent, reaching N31.18 billion in Q1 2023 compared to N26.82 billion in Q1 2022. The majority of the revenue, amounting to N26.81 billion, was generated from trading activities.
Operating expenses have also seen a significant increase, rising by 58 percent to N1.79 billion in Q1 2023 from N1.14 billion in the same period of the previous year. On the other hand, other income decreased by 11.45 percent to N36 million in Q1 2023, compared to N40.7 million in Q1 2022.
Finance income experienced a substantial decline of 80 percent to N4.4 million in the first three months of 2023, as opposed to N22.4 million recorded in the same period of 2022. This decrease can be attributed to a decline in interest income from short-term bank deposits.
However, finance costs witnessed a 44 percent increase to N310.6 million in Q1 2023, compared to N215.6 million in Q1 2022. This rise is attributed to higher interest on loans, influenced by successive interest rate hikes implemented by the central bank.
Despite the challenges faced, the profit for the period showed a slight increase of 0.9 percent, reaching N1.09 billion compared to N1.08 billion in the corresponding period of 2022. Total equity and liabilities for the company amounted to N61.4 billion as of March 31, 2023, indicating an increase from N53.9 billion recorded in the same period of the previous year.
Looking at cash flows generated from operating activities, there was a loss of N3.48 billion in the first quarter of 2023, contrasting with a gain of N1.66 billion in the same period of 2022. Net cash used in investing activities also experienced a loss, amounting to N387.6 million, compared to N844.9 million in Q1 2022. However, there was a 2.1 percent increase in net cash generated from financing activities, amounting to N4.8 billion in the period under review.
As of March 31, 2023, cash and cash equivalents grew by 8.7 percent, reaching N11.69 billion, compared to N10.75 billion recorded in the same period of 2022.
The downstream oil and gas sector in Nigeria has faced financial challenges due to the Nigerian National Corporation Limited (NNPLC) being the sole importer of premium motor spirit (petrol). However, the industry dynamics are expected to change with the removal of petrol subsidy and the upcoming inauguration of the 650,000 barrels per day Dangote Refinery in the second quarter of this year. The refinery is anticipated to alleviate fuel scarcity and address the investment gaps in the downstream oil and gas sector.
Eterna Oil remains committed to navigating these challenges and leveraging upcoming industry developments to drive growth and profitability. The company continues to explore opportunities to optimize operations and enhance shareholder value.
