TotalEnergies Stages Earnings Rebound, Beats Targets in Q2

Total Energies Marketing Nigeria Plc delivered a strong earnings rebound in the second quarter of 2026, surpassing management’s targets and reversing a trend of sales revenue losses that had persisted through the previous year.

Sales revenue surged from N202 billion to N247 billion year-on-year, and from N197 billion in the previous quarter, handily beating management’s Q2 target of about N170 billion. This marks the healthiest quarterly sales growth for the company in six consecutive quarters.

The company’s interim financial report for the half-year ended June 2026 shows that the Q2 rebound accounted for a majority share of the half-year numbers.

After losing more than N274 billion in revenue in 2025 and a further N25 billion in Q1 2026,  Chairman Jean-Philippe Torres attributed TotalEnergies’ recovery to the stabilisation of product supply and reduced price volatility, stemming from improved local refinery operations.

Cost rationalisation enabled a return to profit in Q1 despite ongoing sales challenges. By Q2, the company advanced from cost-saving to sales recovery, resulting in the most impressive profit performance in recent years.

Sales revenue reversed from a nearly N58 billion drop in Q2 last year to a N44.5 billion increase, closing at around N247 billion for Q2 2026.

The sales figure accounted for 55.6 per cent of half-year turnover, which reached nearly N444 billion at the end of June 2026.

While the cost of sales grew at 22 per cent year-on-year—nearly in line with revenue growth—cost savings came mainly from lower selling and distribution expenses and a decline in administrative costs.

These savings lifted Q2 operating profit to N8.3 billion, over two-and-a-half times the figure from a year earlier.

Finance expenses also fell sharply, from over N7 billion in Q2 last year to under N4 billion in Q2 2026. Net finance costs dropped from over N6 billion to N3.5 billion, enabling a swing from a pre-tax loss of N2.8 billion last year to a pre-tax profit of N4.8 billion in Q2 2026.

The Q2 profit represents more than 71 per cent of the half-year pre-tax profit of N6.7 billion. Net profit for the quarter reached N3.8 billion, nearly three times the management forecast of N1.3 billion.

For the first six months of 2026, sales revenue rose by 4.7 per cent to about N444 billion, outpacing a 3.2 per cent increase in cost of sales. Gross profit increased by 16.6 per cent to N56.5 billion. Cost controls further raised margins, with operating profit up 40.7 per cent to N14.5 billion for the half-year.

Finance expenses significantly decreased from N14 billion to N8.7 billion, transforming a N1.7 billion pre-tax loss last year into a N6.7 billion profit. This improvement was supported by a reduction in interest-bearing debts, from N84.7 billion at year-end 2025 to N73.9 billion by mid-2026.

TotalEnergies closed the first half with an after-tax profit of almost N5 billion, a sharp reversal from a net loss of N2.9 billion a year earlier. Earnings per share recovered from negative N8.41 to N14.58 over the review period.