TotalEnergies 2025 results: Dividends at risk amid financial struggles

TotalEnergies Marketing Nigeria Plc has faced its first financial setback in six years, with its 2025 performance marking a sharp decline.

For the year ended December 31, 2025, the company posted a pre-tax loss of N12.5 billion, a dramatic shift from the N42.26 billion pre-tax profit recorded in 2024.

This downturn was driven by lower revenue, rising costs, and increasing finance expenses.

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**Declining revenues and rising costs **

The drop in revenue was the central factor behind the company’s poor financial performance.

In 2025, TotalEnergies’ revenue fell by 26%, from N1.04 trillion in 2024 to N767.63 billion. The reduction in sales volumes, compounded by external market pressures, left the company struggling to cover its cost of sales, which amounted to N685.56 billion.

This directly resulted in a gross profit of N82.07 billion, a 29% year-on-year decline.

• Despite efforts to manage costs, operating expenses surged. Administrative costs and selling expenses increased by 41.9% and 70.9%, respectively, leading to an 85% drop in operating profit.
• The operating profit plummeted to just N9.49 billion, highlighting the severe challenges TotalEnergies faced as it tried to maintain profitability in a challenging economic environment.
• Additionally, finance costs rose by 12% to N21.99 billion, reflecting higher borrowing expenses, further eroding the company’s bottom line.
• As a result, TotalEnergies saw its total assets decrease by 8%, and retained earnings fell by 21%, signaling a decline in shareholder equity.

The pre-tax loss is not just a reflection of poor performance in 2025 but also a sign of deeper financial struggles that have weakened the company’s position across several key metrics.

**Dividends at risk **

One of the most concerning consequences of TotalEnergies’ financial downturn is the impact on its historically strong dividend track record.

• Over the past five years, the company has been consistent in increasing its dividends, growing from N6 per share in 2020 to N40 per share in 2024, reflecting an impressive compound annual growth rate (CAGR) of over 60%.
• However, with the company now facing significant losses, the sustainability of these dividends is at risk.
• Investors may need to brace for a potential disruption in dividend payments as the company works to stabilize its financial position.

**Stock performance and valuation **

The company’s share price has also shown weakness.

• TotalEnergies’ stock declined by 8.31% in 2024, closing at N640, and has remained flat in 2026

In terms of valuation, TotalEnergies is trading at about 5 times its book value.

While this premium may reflect expectations of future earnings and growth potential, the negative EPS and overall poor performance suggest that investors may be paying a high price for the stock relative to its current financial health.

This raises concerns that the stock may be overvalued, especially given the company’s struggles to maintain profitability and its uncertain future.

**The road ahead: A question of recovery **

As TotalEnergies navigates these financial challenges, its ability to regain profitability and restore its dividend policy will depend on its capacity to manage costs effectively and stimulate revenue growth.

• The company must also contend with broader market conditions and internal restructuring to rebuild investor confidence.
• For now, the outlook remains uncertain, and shareholders should adjust expectations. The immediate future for TotalEnergies looks to be one of cost-cutting and strategic recovery rather than growth.
• Investors may need to accept that dividend payouts could remain on hold until the company stabilizes its finances and demonstrates sustainable profitability once more.

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