Japaul links N8bn after-tax loss to economic activities

Japaul Oil & Maritime Services plc recently released its consolidated financial statements for the full year period ended December 31, 2015.

The company’s revenue declined to N8.148bilion from a preceding year highs of N10.572billion. Gross profit declined to N2.230billion from N4.198billion in 2014.

The management stated that the decline in the pace of economic activities and weak economic fundamentals in the oil and maritime industry hampered growth in the sector, resulting in underwhelming financial performance for industry players, including Japaul Oil and Maritime Plc.

Japaul Oil & Maritime Services Plc was incorporated on 29 June 1994 as a private limited liability company and commenced business in January 1997. Japaul Oil is in the business of oil and maritime services. The Company’s shares are listed on the Nigerian Stock Exchange (NSE).As at year end, the Company has five subsidiaries, namely: Japaul Shipping & Offshore Services Limited, Japaul Mines & Products Limited, Japaul Dredging Services Limited, Japaul Gulf Electro Mechanical, LLC, Dubai, U.A.E; and Emirates Gabbro Quarry, LLC, Dubai, U.A.E.

The principal activities of the group are engaging in oil and maritime services in the upstream segment of the oil and gas industry. The group’s scope of operations covers the provision of offshore oilfield vessels, dredging activities in oilfields/locations, quarry services, maritime and logistics, oil flow lines/pipeline construction in swamps.

The results at the Nigerian Stock Exchange showed that  Japaul Oil & Maritime Services Plc reported remarkable increase in administrative expenses to N6.362billion from preceding year lows of N3.500billion.

Operating loss rose to N4.042billion from a low of N804.408million in 2014. Loss before taxation rose to N7.899billion from N2.258billion loss before taxation in 2014.

Japaul Oil & Maritime Services plc recorded loss from continued operations for the year in review stood very high at N8.036billion from a loss from continued operations at N2.584billion in 2014. Loss per share rose to 122kobo from 42kobo in 2014.

The unfavourable operating environment and other challenges notwithstanding, the board and management of the group have declared their desire to reposition the company for growth and improved performance.

It has however reaffirmed that it would focus in 2016 on driving improvements in its underlying asset quality, cost efficiency, enhanced revenue generation and extracting synergies across the group.

To this end, it stated that it would be proposing to its shareholders during the AGM in June, capital raising either by way of rights, foreign investors, private placement among others.

Already there are foreign investors that have indicated interest in the Company and are ready to inject millions of dollars as a result of the intricate value seen in the Company.

The company further stressed that in order to achieve profitability in 2016; it plans to restructure its operation to focus on its core competences.

In this regard, some of its equipment’s either under-utilised or not functioning as a result of the business environment would be sold and the proceeds plugged back into areas of its operations with better prospects for growth.