Total CI: Petroleum

The Company

 Total was established in Côte d’Ivoire in 1947 and currently engages in downstream, refining and marketing activities. Its main assets include a gas filling centre (domestic liquefied natural gas), two aviation fuel depots (Abidjan and Yamoussoukro) and participation in the national refinery company, Société Ivoirienne de Raffinage. With 158 gas stations across the country, Total CI has the largest distribution network of oil products in Côte d'Ivoire.

Until 2011 Total CI was unable to sell its products in the northern part of the country due to the political crisis that split the nation in two. With peace reinstated, Total CI was able to take advantage of the end of the crisis by reopening 24 gas stations in the north, centre and west part of the country. Total CI has since been recovering the market share it lost – which stood at 25% in 2002 – by focusing on rehabilitating and reconstructing gas stations.

As a result of these efforts, 2013 revenues grew some 7% year-on-year (y-o-y) to CFA274.06bn (€411.09m), bolstered by a 4.66% increase in sales volumes, to 382,000 tonnes. Meanwhile, net profit reached CFA7.47bn (€11.21m), up 16% y-o-y. This strong performance was due mainly to higher sales, better financial results and an improved gross margin – 14.11% compared to 13.30% in 2012. The strategy implemented to take advantage of higher demand and improve logistics and service quality helped boost investments further, from CFA6.26bn (€9.39m) in 2012 to CFA7.61bn (€11.42m) in 2013.

Outlook

Sales growth is on pace to continue in 2014. As of the end of the first half of the year, overall sales had increased by 5.4% y-o-y to CFA146.48bn (€219.72m) thanks to the sharp growth of domestic sales, which were up 8.4% by volume. However, the net income from continuing operations fell by 5.7% to CFA5.43bn (€8.15m), impacted by the rebranding project and external growth strategy of acquiring independent companies (for example, 18 Ivoirienne d’Hydrocarbures gas stations) in the first half of 2014.

In terms of competition, the Ivorian market is split between the state-owned company, PETROCI, and private companies, including Total CI, Vivo Energy (Shell), Energy CI, Pétro Ivoire, Corlay, Oryx Energies and other much smaller independent companies. The competition is stiff, with the large number of gas stations putting downward pressure on revenue per station.

Nonetheless, the sector has strong growth potential, driven mainly by the mining, aviation and automobile sectors. The country is working on a large number of mining sites discovered in the western part of the country – specifically, iron mining in the mountains of Klayo, Gao and Nimba, and nickel mining in Sipilou and Biankouma. This sector is expanding considerably, driven by high demand, which should lead to an increase in Total CI’s sales volumes.

For its part, the aviation industry – which is taking advantage of the recovery of operations and arrival of new international airlines in the country – is giving Total CI the opportunity to boost its sales from this segment, which were up 6% y-o-y in 2013. Marginal growth in the automobile sector, driven by the projected 8.2% GDP growth in 2014, should also have a positive impact on the sales of petroleum products.

Development Strategy

Total CI’s strategy relies on intensifying its presence across the country and capturing growth in market segments like mining, large consumer businesses and aviation.

Furthermore, some 80% of the company’s retail sites are under management control. Total CI looks after its employees and provides them with the opportunity to become managers after completing a rigorous selection and training process.

Total CI planned to boost its capital expenditure to CFA12bn (€18m) in 2014, double the average of CFA6bn (€9m) in previous years. These investments are in keeping with the company’s external growth strategy – seen through the acquisition of independent players and the extension of its distribution network, with six new gas stations constructed in 2014.