Recently, Forte Oil plc, a public liability company listed on the Nigerian Stock Exchange (NSE) released its full year 2015 audited financial report to investors and shareholders at the nation’s bourse.
The premier integrated energy solutions provider reported revenue decline to N124.617billion compared to N170.128bn same period in 2014. Profit before income tax increased 16.7percent to N7.012bn compared to N6.006bn recorded in 2014.
Profit after income tax increased 30percent to N5.794bn compared N4.457bn same period in 2014. Earnings Per Share (EPS) grew 86.8percent to N4.11 compared to N2.20 in 2014. The board of directors also proposed a cash dividend of N3.45 per share of the Company’s common stock which will be paid to all shareholders upon the ratification of the proposal at its forthcoming Annual General Meeting.
Operational highlights show that revenue fell by 25percent from N122.6bn in 9months 2014 to N91.6bn in 9 months 2015 as a result of reduced importation of petroleum products by the company due to prolonged delays by the government in making subsidies payment and a drop in pump prices. This was further exacerbated by nationwide strikes by downstream sector workers.
The share price of Forte Oil Plc stood at N342 as at Monday this week from a 52-Week low of N146.51. Listed on the Oil and Gas sector (Petroleum and Petroleum Product subsector), the company has a market capitalisation of N445.448billion as at Monday and shares outstanding of 1,302,481,103 units.
The company attributed its growth in profits to the significant increase recorded in the sales of energy in the power generation segment as well as Premium Motor Spirit (PMS), Automotive Gas Oil (AGO), Aviation Turbine Kerosene (ATK) and the Production of Chemicals; Lubricants and Greases.
Demand for lubricants is driven by road transportation, marine operations and industrial activities. Forte Oil has a blending plant in Apapa with a capacity of 50,000 metric tonnes per annum and capability to produce 100 different grades of lubricant oils. The Company leverages its technical partnership with British Petroleum to ensure the provision of high quality international standard lubricants through environmentally friendly production processes. Key product brands include Synth 10000, Super V and Visco 2000.
Julius Omodayo-Owotuga, Group Chief Financial Officer, Forte Oil plc while commenting on the results said, “The decline in revenue of 27percent was as a result of the company strategy to reduce importation of Premium Motor Spirit so as to reduce the Company’s exposure to subsidy receivables from the Federal Government”.
He added further that “Other income increased by 190percent due to sale of Investment property, investment in securities held to maturity, freight income from the investment made in the 100 trucks of the previous financial year to mention a few”. “Our ability to provide a profit for our shareholders is testament to our belief that the business is on a solid and safe trajectory and will continue to consolidate on gains made”
Also commenting on the full year results, Akin Akinfemiwa, Group Chief Executive Officer, Forte Oil plc said; “This result in a testing economic climate which we operate, is the reward from the investments made by the Company in its core business and its people. It also clearly demonstrates the resilience of our business. Furthermore, our vision to diversify into Power generation has proved to be very successful not just in the near term but in the long term and we see tremendous growth opportunities in that space. He further attributed the group’s sustained superior performance to highly motivated and skilled employees as well as excellent customer service delivery across all business lines.”
Recall that at the company’s “2015 Facts Behind The Figures” presentation at the Nigerian Stock Exchange, the foremost indigenous major marketer of refined petroleum products told analysts and investors that it commenced its five-year growth and consolidated strategy (New Frontiers) for all its strategic business units which includes strategic retail business expansion, increased commercial customer base for both fuels and lubricants, improved operational efficiency and logistics and talent management and development.
Forte Oil also reintroduced LPG in May 2015 as part of its efforts to increase product offering and diversify into higher margin related products. Headquartered in Lagos, Nigeria’s economic nerve centre, Forte Oil has a strong presence in thirty-six states of Nigeria and the Federal Capital Territory (FCT), Abuja.
The Company operates a network of 500 outlets spread across the Country with major fuel storage installations at both Apapa (Lagos State) and Onne (Rivers State). Its Aviation Joint User’s hydrants in Ikeja and Joint Aviation depots in Abuja, Port Harcourt and Kano makes it one of Nigeria’s leading providers of aviation fuel for local and international airlines.
In addition to these strategic retail and commercial network in Nigeria, Forte Oil PLC is also well established in Ghana under the trade name-AP Oil and Gas Limited (APOG), with a network of retail outlets, liquefied petroleum gas plants and a lubricant blending arrangement with Tema Oil blending plant. Forte Oil is currently using its presence in Ghana to leverage its expansion into other West African Countries as it seeks to dominate the African Energy market.
Demand for white products is generally driven by transportation (PMS), independent power generation (AGO) and household needs (HHK). In 2014, Forte Oil had 14percent market share amongst the major marketers in the White Products segment of the downstream sector, making it a key player in this segment. The company plans to boost revenue, gain market share and improve operating margins by focusing on retail network optimisation and strategic expansion through acquisition of prime retail sites.
“We will diversify our revenue base via the reintroduction of new product lines (LPG, LPFO, BITUMEN) and pursue an aggressive expansion into the West African market space”, the CEO said at the “2015 Facts Behind The Figures” presentation at the bourse.
The company planned efficient and effective logistics with the injection of 100 brand new trucks to support the uninterrupted supplies of petroleum products across the country and exceptional customer service delivery. Also it planned to leverage on technology, strategic partnerships and alliances as part of its ongoing effort to boost its NFR income and provide innovative and tailored made solutions in its bid to ensure superior customer experiences.
Forte at the NSE informed investors of its plans to upgrade its mud plant facility and increase storage capacity; and enlarge its laboratory capacity to meet standards that can allow tests that are typically run off-shore to be done in-country; noting that they can set a pace in this area.
It also planned to invest in chemical warehousing – drilling fluid chemicals; engineering services – project designs and management via the establishment of the consulting firm; acquire drilling equipment/services, marine supply vessels, OCTG warehousing; expand into Brine Filtration Services, Wellbore Clean Up Services, offshore environmental and safety services including waste management.
Forte Oil plc has a footprint in the upstream oil services sub-sector, where is has established a reputation of efficiency; servicing the upstream sector under trade name- Forte Upstream Services Limited (FUS). It also engages opportunities in the upstream sector to fulfill its aspirations of being present at every point of the energy value chain. Its acquisition of the 414 mw Geregu Power Plant is a demonstration of the company’s strategy to deliver long term returns for its shareholders.
Iheanyi Nwachukwu
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