2023 Q3: Eterna Plc reports a 547% increase in pre-tax profit Idika AjabyIdika Aja

We have more details on Eterna PLC, here are the first set of financial numbers that investors should pay attention to. The Nigeria Stock Exchange is off to a good start with many stocks doing well. What’s there for Eterna PLC investors? Let's see.

Eterna Plc reported its 2023 Q3 results showing pre-tax profits grew by 547.46% year on year, reaching N2.104 billion. 

Key highlights Q3 2023 vs Q3 2022 

Revenue: N54.034 billion +55.64% YoY 

Cost of sales: N49.316 billion +51.12% YoY 

Gross Profit: N4.719 billion +126.33% YoY 

Selling and distribution expenses: N85.032 million -17.70% YoY

Administrative expenses: N2.443 billion +56.99% YoY 

Operating profit/(loss): N2.205 billion+356.75% YoY 

Net foreign exchange gain: N168.9 million

Finance cost: N269.877 million +65.18% YoY 

Profit for the period: N1.310 billion +765.04% YoY 

Earnings per share: N1.00 +733.33% YoY

Cash and bank balances: N7.885 billion -29.34%. 

Total Assets: N70.388 billion +30.37%

Short-term borrowings: N42.412 billion +58.04%

Retained earnings: N1.905 billion –71.49%

Insights: Eterna’s significant growth in pre-tax profit is primarily attributed to the increase in revenue, which is driven by growth in the fuel and lubricant segments

Cost of sales grew slower than revenue, contributing to a comfortable 126.33% growth in gross profit.

The high cost of fuel-to-fuel revenue ratio, around 93%, is a concern. This suggests that a significant portion of the company’s revenue is being used to cover fuel costs.

Eterna experienced a net foreign exchange gain of N168.9 million in Q3 and a loss of N9.622 billion in Q2.

These fluctuations in foreign exchange gains and losses have significantly impacted the company’s financial performance. The foreign exchange loss in Q2 appears to have contributed to the overall 9M pre-tax loss of N3.428 billion, despite the 765.04% growth in post-tax profit in Q3.