In brief
- Profit Recovery Driven by Cost Containment and Finance Gains: TotalEnergies Marketing Ghana Plc (TOTAL) posted a strong earnings growth in 9M2025, with net profit rising 36.4% y/y to GHS 264.4mn, supported by a 2.2% y/y decline in cost of sales and lower finance costs (-55.0% y/y). Revenue remained broadly flat at GHS 5.1bn (+0.2% y/y) due to weak volume growth amid competitive market conditions. Despite this, gross profit increased to GHS 701.3mn, lifting gross margin to 13.7%, while operating and net margins improved to 8.0% and 5.1%, respectively.
- Competitive Pressures Constrain Pricing Flexibility and Revenue Growth: The downstream petroleum market remains highly competitive, with 192 licensed OMCs, several of which offer competitive pump prices to capture market share. TotalEnergies’ premium pricing, about 11.0% above market leader Star Oil, continues to restrict its ability to defend volumes in price-sensitive segments. Although supported by a strong brand and distribution reach, the company’s premium positioning continues to limit sales volume growth, especially in times of economic strain. We forecast revenue to expand at a slower 9.4% CAGR (FY2025–FY2029) compared with the historical 21.7% CAGR.
- Solarisation Benefits Already Priced in with Margin Gains Fully Captured: TotalEnergies’ solarisation initiative, covering 128 of 273 outlets (47%), has improved operating efficiency and moderated OPEX growth to 17.5% (2018–2023) from 19.4% (2012–2017). We forecast OPEX to grow at 16.3% (2025–2029), translating to an average operating margin of 7.0%, higher than the historical 5.6%. However, with the stock up 208.7% YTD to GHS 40.50, these gains appear fully priced in, far exceeding our fair value estimate of GHS 30.84. In our view, the rally reflects market over-optimism and leaves the stock vulnerable to price correction
- Sustained Dividend Strength, but Income Appeal Weakens at Current Price: TotalEnergies continues to demonstrate dividend consistency, with a five-year average yield of 16.4% (2020–2024) and a payout ratio of 47.6%. However, the 208.7% surge in share price has compressed yields to average of 15.1% (2021–2025) and a current 6.3% yield, now below the 13.02% 364-day T-bill rate, though still above GOIL’s 2.1% yield. While dividends remain reliable, the significant yield compression reinforces our view that the stock’s valuation has outpaced earnings growth potential and no longer offers attractive income upside.
- Key risks to valuation: Uncertain outlook for demand recovery, intensifying competitive pressures, exchange rate volatility, unexpected global energy price shocks, regulatory risks and price controls, rising finance costs and supply chain disruptions
Rating Summary:
We issue a SELL rating on TotalEnergies Marketing Ghana Plc (TOTAL), as we believe the stock’s price has run ahead of its fundamentals. The share price has surged 208.7% year-to-date to GHS 40.50, far exceeding our fair value estimate of GHS 30.84. This rally, in our view, reflects excessive market optimism surrounding the company’s solarisation initiative, cost-efficiency gains, and dividend stability, all of which are already priced into the current valuation. We note that, the solarisation programme has improved operational efficiency, reducing reliance on grid power and moderating operating expense growth to 17.5% (2018–2023) from 19.4% (2012–2017). We forecast operating expense to grow at an average of 16.3% (2025-2029), culminating in a forecast operating margin to average 7.0% between FY2025 and FY2029, only modestly above the historical five-year average of 5.6%.
However, competitive pressures in Ghana’s downstream petroleum market have intensified, with a total of 192 licensed OMCs, several of which offer aggressive pump-price discounts to capture market share. This dynamic continues to erode pricing flexibility and volume growth for TotalEnergies Ghana, while gradually constraining its overall market position. We estimate revenue growth to decelerate to a 9.4% CAGR (FY2025 – FY2029) from a historical 21.7%, reflecting the challenges of maintaining market share amid intensifying price competition. Additionally, global energy prices could remain depressed in the short-to-medium term as faltering global demand shifts the crude oil market into oversupply with the World Bank forecast average price of USD 61.5pb (2026 – 2027). Domestically, we expect a more stable Ghanaian Cedi with an average annual depreciation of 6.8%. This combined effect of a likely depressed energy prices and relatively stable exchange rate will cap the upside for domestic pump prices, restraining topline momentum.
The company has maintained a consistent dividend payment, steadily rewarding shareholders over the years. The company’s five-year average dividend yield stands at 16.4% (2020–2024), underpinned by a five-year average payout ratio of 47.6%. However, the sharp 208.7% year-to-date rally in the share price has compressed the dividend yield to an average of 15.1% (2021–2025) and a current yield of 6.3%., While TOTALEnergies’ current dividend yield of 6.3% appears unattractive relative to the current 364-day Treasury bill rate of 13.02%, it remains higher than GOIL’s dividend yield of 2.1%. However, we opine that the sharp decline in TOTAL’s dividend yield supports our thesis that the current price rally appears to outpace the company’s fundamentals. We obtained our fair value estimate using a blended valuation approach comprising Discounted Cash Flow (40% weight), Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortisation – EV/EBITDA – (45% weight), and Dividend Discount Model (15% weight). The intrinsic value estimate is based on a 15.69% risk-free rate, a weighted average cost of capital (WACC) of 20.7%, and a terminal growth rate of 5.0%.