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Tag: Mobil Oil Nigeria

  • 11 Plc relaunches aviation fuel sale

    11 Plc (formerly Mobil Oil Nigeria Plc) has recommenced the sale and marketing of aviation jet fuel (ATK) at the Murtala Mohamed International Airport and General Aviation Terminal (GAT – Domestic), in collaboration with Air BP.

    Its spokesman, Bobby Ayomike,  in a statement, said the company’s aviation business, which has been inactive for the past five years, is being revitalised in the wake of the construction of a new 20million litre aviation jet fuel (ATK) tank and laying of new ATK pipelines linking the company’s facility at Apapa with the Apapa Jetty.

    Speaking on the development, the company’s  Director/Chief Executive Officer, Mr. Adetunji Oyebanji, said:  “We are delighted with the relaunch and our collaboration with Air BP. Air BP is one of the world’s largest suppliers of aviation fuel products and services. We are leveraging their innovative technical support and risk management expertise to provide best-in-class aviation fuel services to airline customers.”

    The company, under its new management, he said,  continues to take huge strides in the oil and gas downstream sector.

    He added that the company in keeping with its strategic investment drive geared toward repositioning for maximum output and improving its  growth and earning potential.

  • Mobil Oil Nigeria changes name to Double One

    The Nigerian Stock Exchange (NSE) at the weekend formally changed the name of Mobil Oil Nigeria to 11 Plc, following the completion of the name change process by the petroleum-marketing company. The new name-11, will be pronounced as double one.

    The name change was sequel to the resolution passed by the company’s shareholders at its annual general meeting held on May 24, 2017. The company has since obtained a new Certificate of Incorporation from the Corporate Affairs Commission (CAC) bearing the new name.

    The name change was part of the rebranding of the newly acquired company by NIPCO Investments Limited, a wholly owned subsidiary of NIPCO Plc, which had in March 2017 formally taken over the 60 per cent majority equity stake of ExxonMobil Oil Corporation in Mobil Oil Nigeria Plc in a $301 million acquisition deal.

    ExxonMobil and Nipco had in October 2016 executed a sale and purchase agreement (SPA) to sell the former’s majority equity stake of 60 per cent in Mobil Oil Nigeria (MON) to Nipco, an indigenous oil and gas company.

    Formerly known as IPMAN Petroleum Marketing Company Limited (IPMCL), Nipco was incorporated by members of the Independent Marketers Association of Nigeria (IPMAN) on January 8, 2001 as a private limited liability company to participate in the distribution of white petroleum products business in Nigeria.

  • NIPCO takes over ExxonMobil’s 60% stake in Mobil Oil Nigeria

    NIPCO takes over ExxonMobil’s 60% stake in Mobil Oil Nigeria

    • Launches N60.2b bid for minority shares

    NIPCO Investments Limited, a subsidiary of NIPCO Plc, at the weekend took over the 60 per cent majority equity stake of ExxonMobil Oil Corporation in Mobil Oil Nigeria Plc.
    This is coming on the heels of the $301million acquisition approval by capital market regulators.
    The cross deal for the transfer of the 60 per cent equity stake from ExxonMobil to NIPCO was executed on the Nigerian Stock Exchange (NSE) at the weekend, with Cordros Securities Limited acting as execution stockbroker for the deal.
    The deal, worth N90 billion at current exchange rate, was one of the biggest transactions in the downstream sector in recent years.
    Both the Securities and Exchange Commission (SEC) and NSE as well as other Nigerian and relevant foreign regulators had approved the deal.
    Under the deal, ExxonMobil transferred its total shareholding of 216.36 million ordinary shares of 50 kobo each to Nipco Investments Limited for the consideration of $301 million.
    The block divestment was done through the negotiated cross deal platform of the Exchange, a special-purpose trading platform that is meant for voluminous transaction equivalent to five per cent or more of the issued shares of any company.
    By the cross deal, it implies that the buyer and the seller had been prearranged and the transfer at the stock market was a mere perfection of the agreement between the two. The negotiated cross deal allows the parties to the deal to close the deal at reduced cost.
    The completion of the acquisition has also triggered a mandatory tender offer (MTO) bid by NIPCO for the minority shareholders in line with Section 131 of the Investment and Securities Act (ISA) and Rule 445 of SEC, which make it mandatory for any institution or person that acquires at least 30 per cent of a company to make an MTO to other minority shareholders.
    Under the terms of the MTO, NIPCO is expected to offer to buy the minority shares at the same price of N417.12 used under the ExxonMobil transaction.
    Mobil Oil Nigeria opens today at the NSE at N300 per share, thus the tender offer price implies a premium of 39.04 per cent. Mobil Oil Nigeria has total outstanding shares of 360.595 million ordinary shares of 50 kobo each, with the remaining 40 per cent minority shares totalling 144.238 million ordinary shares of 50 kobo each.
    Sources said the board of NIPCO has applied and received approval of SEC to proceed with the MTO.
    ExxonMobil and Nipco had in October 2016 executed a sale and purchase agreement (SPA) to sell the former’s majority equity stake of 60 per cent in Mobil Oil Nigeria (MON) to Nipco, an indigenous oil and gas company.
    Formerly known as IPMAN Petroleum Marketing Company Limited (IPMCL), Nipco was incorporated by members of the Independent Marketers Association of Nigeria (IPMAN) on January 8, 2001 as a private limited liability company to participate in the distribution of white petroleum products business in Nigeria.
    Mobil Oil Nigeria was incorporated as a private limited liability company in 1951 and converted to a public limited liability company in 1978. Its shares were listed on the NSE in 1979. Mobil Oil is a subsidiary of Mobil Oil Corporation of the United States, which holds 60 per cent equity stake.
    Nipco Managing Director, Mr. Venkataraman Venkatapathy, said the SPA marks the beginning of a six-month transition for the effective takeover of the downstream oil giant.
    “Nipco considers this acquisition an important synergy. It is part of our strategic move to support Nipco’s continuous growth and expansion of its retail footprint. We are confident of adding tremendous value to MON and likewise MON will add a huge value to Nipco. In furtherance of this value addition, Nipco will continue to maintain the Mobil brand on its retail outlets as well as continue to blend and sell the Mobil brand of lubricants under Branding Licence(s) from ExxonMobil,” Venkatapathy said.
    According to him, Nipco would justify the confidence repose in it by ExxonMobil for selecting it as the preferred bidder for the acquisition of MON and Nipco will continue to ensure full brand compliance with ExxonMobil’s global standards as well as rigorously sustain and follow ExxonMobil’s code of conduct, ethos and operational excellence.
    “MON will continue to run as a separate, distinct and independent company ,from Nipco Plc .Each with its own chief executive officer .Each chief executive officer will report to its board of directors,” Venkatapathy stated .
    According to him, in addition to giving the employees much needed assurances on their job safety, Nipco’s goal is to increase presence and efficiency by expanding MON’s retail footprint to a minimum of 300 by December 2017 and make it a vibrant one.

  • Total Nigeria vs Mobil Oil Nigeria: Same turf, different results

    Total Nigeria vs Mobil Oil Nigeria: Same turf, different results

    PETROLEUM stocks are popular with Nigerians. One of the earliest organised sectors with long-established brand names, the centrality of premium motor spirit (PMS), popularly known as petrol, to the daily living of Nigerians, who depend mostly on petrol as substitute for epileptic public power supply, has continuously reinforced the brand awareness of petroleum stocks. But even with hundreds of brand names now parading the downstream, the sector is still dominated by few companies. These are usually referred to as oil majors.

    , foreign ownership, listing history and fundamental assets. A subsidiary of French multinational and Europe-leading oil company-Total S. A, Total Nigeria has considerable influence and size in Nigeria and globally. With five Liquefied Petroleum Gas (LPG) bottling plants, three lubricant blending plants, four aviation depots and hundreds of retail outlets spread across Nigeria, Total Nigeria prides itself as the leader in the industry. Mobil Oil, the earliest petroleum-marketing company to be incorporated in Nigeria, is a subsidiary of Mobil Oil Corporation of the United States of America.2

    With between 64 and 59 years of operations in Nigeria and 36 years as quoted stocks, both companies are the earliest examples of blue chips that several investors know. Interestingly, both companies were listed in the same year, in the same month and within the same week. While Total Nigeria’s assets base substantially outweighs Mobil Oil Nigeria’s, stripped down to the barest, both companies have similar net assets base. They also operate in an industry with little product differentiation and deregulation.

    Audited reports and accounts of both companies however appear to be showing marked differences.  Year-on-year and on the average, Mobil Oil Nigeria appears to know the oil field better than its competitor. While the reports seem to illustrate the tight top-line in the largely regulated sector, the mid-line and bottom-line differ according to the logistics, management and internal structure and control of the companies. Audited reports and accounts for the year ended December 31, 2014 showed that the two companies barely grew their top-line by one per cent. That is the only similarity. While Total Nigeria appears to be losing steam, Mobil Oil Nigeria shows considerable improvement in profitability and returns.

     

    Sales Generation

     

    Turnover growth, expectedly, remains generally muted. Both Total Nigeria and Mobil Oil Nigeria grew the top-lines by one per cent in 2014. Total Nigeria had grown turnover by nine per cent in 2013. Mobil recovered from a decline of three per cent in 2013 with one per cent growth in 2014. On the average, Total Nigeria has grown its top-line by an average of five per cent over the past two years as against a two-year average decline of one per cent recorded by Mobil.

     

    Profitability

     

    Mobil has shown stronger fundamental performance than its competitor over the years. Besides the average growth, Mobil ran a more profitable business in the immediate past year while Total Nigeria showed a worrisome decline in intrinsic performance. Mobil’s gross profit grew by 8.0 per cent in 2014 as against 21.1 per cent growth in 2013. However, gross profit margin underlined improved top-line management at 13.5 per cent in 2014 as against 12.6 per cent in 2013. Profit before tax built on this with 65 per cent growth in 2014 as against 26 per cent in 2013. Average pre-tax profit margin, which indicates average pre-tax profit on each unit of sale, also improved from 6.5 per cent in 2013 to 10.6 per cent in 2014. After taxes, net profit grew by 84 per cent in 2014, an impressive consolidation on 21 per cent recorded in 2013.

    On the other hand, Total Nigeria’s gross profit dropped by 2.75 per cent in 2014 as against modest growth of 9.5 per cent in 2013. Gross profit margin followed the downtrend, dropping from 12.1 per cent in  2013 to 11.6 per cent in 2014. Profit before tax dropped by 32 per cent in 2014 compared with an increase of 14 per cent in 2013. This underlined the relapse in the intrinsic profitability with pre-tax profit margin dropping from 3.4 per cent in 2013 to 2.3 per cent in 2014. Profit after tax also dipped by 17 per cent in 2014 as against 14 per cent growth in 2013.

    On the average, Mobil Oil Nigeria shows substantial lead above its competitor. Mobil‘s gross profit has grown by 14.6 per cent over the past two years compared with 3.4 per cent by Total Nigeria. This trend is replicated in all the indices. Mobil has average pre-tax profit growth rate of 45.5 per cent, average gross margin of 13.05 per cent, average pre-tax profit margin of 8.6 per cent and average net profit growth of 52.5 per cent respectively. Total Nigeria, on the other hand, recorded average pre and post-tax profit declines of nine per cent and 1.5 per cent respectively. Average gross margin was lower at 11.85 per cent while average pre-tax profit margin stood at 2.85 per cent.

     

    Actual Returns

     

    While Total Nigeria has steadily maintained a lead in share price at the stock market, Mobil fundamentally makes better returns to investors. Since fundamental returns are intricately linked to underlying profitability, Mobil improved on its returns while Total Nigeria suffered a decline. Mobil returned 17.2 per cent on total assets in 2014 as against 12.6 per cent posted in 2013, indicating a two-year average of 14.9 per cent. Return on equity also increased from 36.5 per cent in 2013 to 47.2 per cent in 2013, representing average return of 41.9 per cent.

    Total Nigeria’s return on total assets almost halved from 10.2 per cent in 2013 to 5.8 per cent in 2014 while return on equity slipped from 40.3 per cent to 31.8 per cent. Average returns on assets and equity thus stood at eight per cent and 36.1 per cent respectively.

     

    The Bottom-line

     

    The queues are back at the petrol filling stations. That is the regular reminder of the state of the downstream sector. With a seemingly stunted deregulation and the intricacies of the politics of the oil business, petroleum companies are influenced by more by exogenous rather than endogenous factors. These compound the almost monolithic nature of the business where little product differentiation gives less room for marginal errors. The margin of profitability, and sustainability of such, thus depends on high level of appropriate mix of often-difficult variables. Total Nigeria is exploring initiatives to break away from the mono-product syndrome with its recent diversification into the solar power business. But this obviously has not gained the traction to fundamentally impact the bottom-line. While Mobil’s performance was somehow boosted by a one-off asset sale, it obviously has shown better choices. Its focus on the midline and financing options has strong influence on overall performance. Mobil has less leverage and financing burden compared with Total, which is substantially leveraged and carries the burden of multi-billion naira financial charges, which further clobbered the overall performance.

  • Total Nigeria vs Mobil Oil Nigeria: Neck to neck

    Total Nigeria Plc and Mobil Oil Nigeria Plc are the two most capitalised petroleum-marketing companies in Nigeria. Altogether, they accounted for some 52 per cent of total market capitalisation of the downstream oil sector at the stock market. Total Nigeria leads the capitalisation table with 28 per cent while Mobil Oil Nigeria trailed with some 26 per cent. A subsidiary of French multinational and Europe-leading oil company-Total S. A, Total Nigeria is a company of considerable influence and size in Nigeria and globally. With more than 500 retail outlets, five Liquefied Petroleum Gas (LPG) bottling plants, three lubricant blending plants, four aviation depots and many other facilities, Total Nigeria is undoubtedly a leading oil-marketing company.
    Mobil Oil is the earliest petroleum-marketing company to be incorporated in Nigeria and has operated for more than six decades in Nigeria. Mobil Oil Nigeria is a subsidiary of Mobil Oil Corporation of the United States of America and it runs a nationwide network of outlets that make the company a household brand throughout Nigeria.
    Both companies shared many similarities. With some 60 years of operations in Nigeria, they have etched their brands and stocks as blue chips. Interestingly, both companies were listed  same year, same month and within the same week.
    Audited reports and accounts of both companies for the year ended December 31, 2011 showed a similar pattern, with recovery in sales characterised with decline in profitability and returns. Where the performance trends differed, the companies intermittently switched roles. While Total Nigeria  led in terms of size of growth, Mobil Oil Nigeria made more profit per every unit of sale and its returns were quite higher than its competitor.
    Sales generation
    Both Total Nigeria and Mobil Oil Nigeria grew the top-lines in 2011 as against general declines in the previous year. Total Nigeria increased sales by 8.3 per cent in 2011 as against a drop of 10.1 per cent in 2010. Mobil grew sales by 6.4 per cent in 2011, a major recovery from the declines in the past two years when sales dropped consecutively by 7.1 per cent and 5.9 per cent in 2009 and 2010 respectively.
    Profitability
    Mobil’s gross profit grew by 4.2 per cent in 2011 but profit before tax dropped by 3.4 per cent in 2011 as against significant growth of 41 per cent. Net profit after taxes also slipped by 3.4 per cent in 2011 compared with increase of 37 per cent in 2010. Gross profit margin dropped marginally from 16.6 per cent to 16.3 per cent while pre-tax profit margin contracted to 8.9 per cent in 2011 as against 9.8 per cent in 2010.
    On the other hand, Total Nigeria’s gross profit grew by 6.6 per cent in 2011 as against a decline of 4.5 per cent in 2010, showing a two-year average growth of 1.05 per cent. The company also replaced its 6.2 per cent decrease in profit before tax in 2010 with a growth of 1.3 per cent. But as margins diminished on item-by-item basis, profit after tax caved in with a decline of 4.0 per cent in 2011 compared with negligible growth of 0.1 per cent in 2010. Underlying profit-making capacity of the company was however, generally weak. Gross profit margin dropped below average to 12.9 per cent as against 13.1 per cent in 2010. Pre-tax profit margin also decreased from 3.6 per cent to 3.4 per cent.
    On the average, Mobil still maintained its lead with higher gross margin and pre-tax profit margin. Compared with Total Nigeria’s average gross margin of 13 per cent, Mobil made about 16.5 per cent while Mobil’s average pre-tax profit margin of 9.35 per cent more than doubled Total Nigeria’s 3.5 per cent.
    Actual returns
    Mobil returned 18 per cent on total assets in 2011 as against 24 per cent posted in 2010 while return on equity slipped from 65 per cent to 55 per cent. Average return on total assets over the past two years stood at 21 per cent while average annual return on equity stood at 60 per cent.
    Meanwhile, Total Nigeria’s return on total assets was almost unchanged at 10 per cent while return on equity dropped from 44.5 per cent to 38 per cent. Average annual return to shareholders thus stood at 41.25 per cent.
    The bottom-line
    Protracted reform in the petroleum sector and continuing controversy that exacerbate global oil variables tend to undermine the potential of Nigerian petroleum companies. These compounded the almost monolithic nature of the business where little product differentiation gives less room for marginal errors. The margin of profitability, and sustainability of such, thus depends on high level of appropriate mix of often-difficult variables.
    Both companies obviously need to explore ways to accelerate sales growth and control cost to deliver higher margins and ensure better returns to shareholders. For now, it’s a neck-to-neck contest of the two oil majors.