MRS Oil Nigeria Plc has been making waves on the Nigerian stock exchange in recent weeks, with its share price soaring by an impressive 36% in December. This surge brings its year-to-date performance to a remarkable 71.42%, demonstrating the company’s strong position in the market.
The positive momentum follows a series of significant developments for MRS Oil, including an impressive earnings report and a strategic partnership with Dangote Refinery, which has raised investor confidence.
Surge in Shares Following Strong Financial Report
On October 29, 2024, MRS Oil released its third-quarter earnings report, which showed a pre-tax profit of N6.2 billion, marking an increase of 108.9% from the previous year’s N3 billion. This strong performance sent a positive signal to the market, and investors responded by pushing the stock higher.
Revenue for the quarter rose by a staggering 141.90%, reaching N169.5 billion. For the year-to-date, MRS Oil has generated N248.7 billion in revenue, with Premium Motor Spirit (PMS) sales accounting for over 85% of this total. The strong performance in the PMS segment has been a major factor behind the company’s impressive growth.
Market Activity and Bullish Trends
Despite some stagnation in the stock’s price during November, MRS Oil experienced a significant revival in December. Following the release of its earnings report, the stock began to gain traction, with four consecutive days of growth. This led to MRS Oil being among the top performers on the Nigerian Exchange for the third week of December.
The stock began the year at N105 per share, and by mid-December, it had reached N126. However, it was not until December that the stock saw a strong resurgence, with a trading volume of 4.1 million shares by December 20, 2024.
Drivers of the Surge in Stock Price
Several factors have likely contributed to the impressive price movement of MRS Oil shares. The earnings report, with its strong profit and revenue growth, is one of the key drivers. The company’s revenue increase was largely driven by its sales of Premium Motor Spirit, which represents the majority of its total revenue.
In addition to this, MRS Oil has been benefiting from a number of strategic moves. One of the most notable of these is the successful completion of the Federal Government’s inaugural oil bid under the Petroleum Industry Act 2021. This bid has seen MRS Oil and other major companies such as TotalEnergies and Sifax secure Petroleum Prospecting Licenses, which allow them to explore and extract oil from both onshore and deep offshore blocks.
This move has positioned MRS Oil for significant growth in the future, and it appears to have contributed to the surge in its stock price during the latter part of Q4.
MRS Oil’s Strategic Partnership with Dangote Refinery
In another development that has captured the market’s attention, MRS Oil has recently entered into a strategic partnership with Dangote Refinery. This partnership has allowed MRS Oil to reduce its petrol prices at select outlets in Lagos, cutting the pump price to N935 per litre from the N1,000 per litre it was selling for in early December.
The price cut is seen as a positive move for consumers, but it also has implications for the company’s future prospects. By making fuel more affordable, MRS Oil is likely to increase its customer base, which could lead to even higher sales volumes in the coming months.
This partnership with Dangote Refinery further solidifies MRS Oil’s position in the market, and it is expected to have long-term benefits for both companies. Analysts are optimistic about the potential for continued growth, particularly as the Dangote Refinery begins operations.
A Bright Future Ahead for MRS Oil
With its strong financial performance, strategic partnerships, and solid market positioning, MRS Oil appears well-equipped to continue its upward trajectory in the Nigerian stock market. The 36% increase in its share price this month is a clear indication that investors are confident in the company’s prospects.
As the company continues to expand its operations and capitalise on its recent successes, MRS Oil’s stock price could see further gains in 2025. The partnership with Dangote Refinery and the company’s growing share of the petrol market are expected to be major factors driving its continued growth.
