Total Nigeria Plc's FY2o2o performance reflected the peculiarity of the 2020 financial year; bedeviled by the COVID-19 pandemic and its resultant logistic difficulties, increased costs, and lower retail margins. The Nigeria downstream oil marketer-Total Nigeria Plc (Total) seems to have had a tough time balancing its costs against sales as its profit dipped. 
The company's gross profit and profit after tax plunged in 2020 despite the significant drop in costs. The key component of the decline in 2020 profit levels is the -29.93% year-on-year (Y-o-Y) decline in revenue to N204.72bn from N292.18bn earned in 2019.
Share Price and Volume Movement- Ambivalent
The company share price started the year with relatively stable movement reflecting that investors were neither optimistic nor pessimistic about the outlook of the company's earning. The height of the pandemic around March and April saw a marginal decline when investors were uncertain of the company earnings. The trend continued to August 2020 before picking an upward trend towards the end of Q3 2020, indicating the return of investors' confidence in the company's future. The company's share maintained a stable price from Q4 2020 towards the end of Q1 2021(see chart 1 below).
By volume, the number of shares traded saw high volatility and recorded low figures through the year 2020 save the breakout points between September and October 2020. The company traded below 60,000 share volume in most of 2020. The sharp increase in volume between September and October could be attributed to the upward trend in the company share price that began the previous month. However, the company could not sustain the increase as the volume returned to its low-traded figure beyond October 2020.
Revenue and Profitability- Slide into Pessimism
Revenue
Total Nigeria's revenue fell by -29.93% Y-o-Y to N204.72bn in 2020, the lowest in the last six years (see chart 2 below). A breakdown of the revenue indicated that both petroleum products and lubricants/others have a significant drop in revenue.
Petroleum products' revenue which constituted over 75% of the total revenue fell by -34.83% Y-o-Y from N241bn in 2019 to N157.05bn in 2020. Similarly, lubricants and others which constituted about 20% of the total revenue also fell by -6.85% Y-o-Y from N51.18bn in 2019 to N47.67bn in 2020.
The company's revenue decline underscores the impact of the pandemic which resulted in low demand for petroleum products and others given the squeeze in economic activities and restricted movements across the country.
Profit Before Tax
The company's profit before tax has trended downward over the last four years with a marginal increase in 2018 and 2020. The profit before tax rose by +5.74% Y-o-Y to N2.91bn in 2020 from N2.75bn in 2019. The increase signaled an improved performance during a pandemic compared to the -77.27% decline in profit from N12.10bn in 2018 to N2.75bn in 2019 (see chart 3 below).
Current Ratio
The current ratio fell by -1.15% Y-O-Y from 0.87 in 2019 to 0.88 in 2020. Given the current ratio benchmark of 2 in the industry, the company had some difficulties managing its resources to meet short-term liabilities with current assets. This trend had been on for the past five years (see chart 4 below).
Liquidity Ratio
The company's liquidity ratio for 2020 was 22.38%, a significant increase from 6.38% recorded in 2019, the highest it has recorded in the last six years. The increase is largely driven by an increase in cash and cash equivalent which grew significantly by +276.72% Y-o-Y to N31.01bn in 2020 from N8.23bn in 2019.  The company has included its funds' balance with Total treasury as cash and cash equivalents since its withdrawal could be made instantaneously. This addition pushed up the liquidity position of the company significantly, away from the downward trend recorded in the previous years (see chart 5 below).
Acid-Test Ratio
Acid-test ratio-a stricter measure of liquidity, further shows that the company had consistently been having a high pile of inventories over the past 6 years.  However, the company acid-test ratio in 2020 rose by +25.93% Y-o-Y to 0.68 from 0.54 in 2019 which suggests that the company clamped down marginally on its stock of finished goods (see chart 6 below).The leverage ratio for 2020 declined, to stand at 115.86% against the 140.81% recorded in 2019. The decline in 2020 can be attributable to a slight decline in the company's debt in 2020. While the company's debts would have declined significantly in 2020, its 2020 debt profile fell marginally largely dominated by the commercial papers issued in the year, which accounted for about 45% of the total debt. Also, the higher magnitudes of the leverage ratios in the last three years reflect a high debt profile relative to shareholders' equity in the company (see chart 7 below).Following the trend of activities in 2020, the company experienced some downturns particularly in revenue, profits, and earnings per share. This may raise investors' concern for the future earnings of the company given the slight decline in earnings per share. However, the company was able to grow its assets, possibly in the hope that economic activities will pick up and demand will recover to the pre-pandemic level in the short run.
 
Going by the current uncertainty of business activities due to the lingering pandemic and the uncertainty of oil demand coupled with the volatility in oil prices, Total may be heading in the right direction by seeking to push itself forward in the drive for cleaner energy in Nigeria. This is because some players in the industry had already recognized the significance of gas in their future revenue and for Total to rebound from its downward trending revenue, the company needs to massively explore the gas option.
 
The concern, however, is that the company currently seems only to be expressing its ambition as a major partner to the government on the National Gas Expansion Programme without making the requisite investment for the transition. Another concern is that the ambition may further be capped by financial challenges given the decline in revenues and profits in recent years.