Amaechi Raphael Chinedu

@Official_ARC·4h

Eterna's profit grew more than sevenfold. A 1.7-point margin change did most of it

Where we start: on Tuesday the All-Share Index edged up 0.02% to 254,289.35, and it's up 63.41% this year. More stocks fell than rose, so the gain came from a handful of names. Today's results story is fuel marketer $ETERNA. For the nine months to September: • Pre-tax profit rose 635.8% to ₦10.28bn, from ₦1.40bn • Profit after tax rose to ₦7.34bn, from ₦325.88m • Revenue rose 71.75% to ₦365.56bn, with fuel sales up 91.19% • In the third quarter alone it made ₦2.61bn before tax, after a small loss a year ago Here's the part worth understanding. Selling fuel is a thin-margin business. Eterna keeps only about ₦6.40 of gross profit from every ₦100 of sales, up from about ₦4.70 a year ago. That sounds tiny, but on ₦365bn of sales the extra 1.7 points is worth roughly ₦6.3bn of extra gross profit. When margins are this thin, a small change moves profit a lot, in both directions. Costs went up too. Admin expenses rose about 68% to ₦12.15bn, so the margin gain had to outrun them. The stock closed Tuesday at ₦42.75, up about 50% this year, so the market had already been expecting a turnaround. Three things worth watching today: 1. How investors react to Eterna's numbers, given that this year's rally was already in the price. 2. $DANGCEM, which holds its analyst call on its nine-month results today, after swinging from net debt to net cash. 3. Small dividend dates coming up: Ikeja Hotel's ₦0.03 qualifies on Friday, Nov 6. Want to see how results season is moving your own holdings? Add your portfolio on Gopexly and follow along. Not financial advice, just what's on the radar.