MRS Oil Nigeria’s Q1 lube profit slides

Nigeria’s MRS Oil Nigeria (MRS), a unit of pan-African conglomerate MRS Holdings, saw its lube profit slump in the first three months of the year as costs surged.

MRS markets and distributes downstream fuels in Nigeria and produces lubricants at its blending plant in Lagos.

Gross profit from its lube unit fell to 22.62mn Nigerian Naira ($54,470) in the first quarter of the year.

Profit fell by more than 80pc from N144.52mn during the same period last year and from N326.97mn during the fourth quarter of last year.

Profit fell even as lube sales rose to N1.02bn in the first quarter. Sales more than doubled from N440.69mn during the same period last year and rose by 9pc from the fourth quarter of 2021.

First-quarter profit fell as costs rose even faster, by more than 230pc to N997mn.

The rise in costs mirrored a surge in global base oil prices in the first quarter of the year compared with year-earlier levels and compared with the final three months of last year.

The depreciation of Nigeria’s currency versus the US dollar over the past year magnified the impact of higher overseas prices.

Base oil prices have risen because of a combination of tight supply and surging crude oil prices.

Blenders in markets like Nigeria now faced the additional challenge of securing sufficient base oil supplies as availability from Europe and Russia tightens sharply.

MRS Oil Nigeria operates a 23,900 kilolitre/yr (21,190 t/yr) lube blending plant and a 1,300 kl/yr grease plant in Lagos. It has base oil storage capacity of some 9,000 kilolitres.

Last year, it said Nigeria’s lubricants market was expected to grow by around 1.5 pc/yr in the five years to 2026 to around 339,520 t/yr.