TotalEnergies Marketing Ghana Plc (“TOTAL”) released its unaudited 1Q2026 financial results, posting a 26.1% y/y plunge in profit after tax to GHS 60.4mn. The fall in earnings was on the back of a 37.6% y/y fall in revenue to GHS 1.2bn, an impairment loss of GHS 9.6mn a reversal from the gain of GHS 1.7mn in the prior year, a 20.1% y/y increase in general, administrative and selling expense to GHS 124.6mn and a 2.4% y/y decline in finance income to GHS 0.2mn. The slump in revenue was driven by a 7.0% y/y contraction in sales volume, compounded by lower pricing, with ex-pump prices of petrol falling by 14.2% y/y, although diesel increased by 5.2% y/y. Cost of sales plunged by 42.8% y/y to GHS 948.9mn. In our view, the decline in cost of sales was partly due to lower procurement volumes following reduced consumption (-7.0% y/y), coupled with a 41.2% y/y appreciation of the cedi against the US Dollar in 1Q2026. Gross profit inched up by 0.7% y/y to GHS 228.0mn, as the decline in cost of sales outpaced the fall in revenue, leading to a 7.4pp y/y increase in gross margin to 19.4%. Operating expense surged by 29.3% y/y to GHS 134.1mn, driven by General, administrative and selling expense (+20.1% y/y, GHS 124.6mn) and Impairment loss of GHS 9.6mn from a gain of GHS 1.7mn in the prior year. As a result, operating profit plummeted by 22.2% y/y to GHS 106.2mn. Finance cost slumped by 75.1% y/y to GHS 3.7mn, due to a 37.4% y/y decline in total debt to GHS 146.4mn, which helped to limit the earnings drag. We observed that during the first pricing window of April 2026, following the introduction of the NPA (National Petroleum Authority) price floor of GHS 13.3/litre for petrol and GHS 17.1/litre for diesel, TotalEnergies Marketing Ghana Plc traded at an 8.9% premium to the petrol price floor and an 8.2% premium to the diesel price floor. In contrast, market leaders GOIL PLC and Star Oil maintained prices at the regulatory floor during the same pricing window. Current pricing dynamics also show TotalEnergies trading at a 6.6% premium to GOIL’s petrol price and an 18.1% premium to its diesel price. Similarly, TotalEnergies currently trades at a 6.6% premium to Star Oil’s petrol price and a 19.0% premium to its diesel price. In our view, this sustained pricing premium has weakened the company’s competitiveness in an increasingly price-sensitive downstream market, contributing to softer sales volumes as retail consumers continue to shift towards lower-priced alternatives. Overall, we expect the pricing-led volume pressure to persist in the near term, limiting market share recovery despite a supportive structural backdrop from Ghana’s “Big Push” infrastructure programme, which should continue to underpin broader sector fuel demand over the medium term. We do not expect these industry tailwinds to fully offset company-specific competitive pressures in the immediate term, leaving revenue growth subdued.