Other incomes catapult Conoil 2013 profit

Income generated from other sources outside normal business has contributed to catapulting Conoil’s profit, analysis of the financial statement of the company that sells gasoline, shows.

For the year ended December 2013, the company’s net income soared by 329.97 percent to N3.07 billion from N714.01 million same period of the corresponding year (FY) 2013, while sales increased by 6.36 percent to N150 billion.

Earnings per share (EPS) spurted by 329.12 percent to 442k in 2013, from 103k in 2012.

The growth at the bottom-line level burgeoned as a result of 853.77 percent increase in other operating income to N2.55 billion in (HY) 2013, from N266.1 million as of (HY) 2012.

Other operating income comprises of income from outside the normal activities of the company such as investment interest, foreign exchange gains and rent income.

The downstream giant has seen ballooning profits after rebounding from the 2012 subsidy gloom that hampered growth of firms operating in the sector.

A lot of companies in the downstream oil and gas sector had their subsidy payments delayed by the Ministry of Finance over a potpourri of scams that rocked the industry.

Consequently, these firms were unable to settle debts owed to banks to finance the importation of petroleum products, thus leading to huge finance debt in their capital structure.

Steady cash flow has helped reduce finance cost by 45.89 percent to N2.25 billion in FY 2013, as against N4.16 billion as of FY 2012.

Furthermore, the company has also reduced debt in its capital structure as debt ratio dropped to 65.55 percent in HY 2013, from 189.088 percent as of HY 2012.

The company has upgraded and expanded its lubricant blending plants at its depots at Apapa, Lagos, Port Harcourt and Kano, with a view to meeting and surpassing customers’ ever increasing demand for its quality engine oil brands.

The board of directors of the oil marketing firm recommended a total dividend payment of N2.78 billion for its 2013 financial year at N4 for every 50 kobo share.

The dividend payment is expected to be rectified by the shareholders at the annual general meeting of the company to be held in September.

This represents a 300 percent increase over the N1 paid in 2012, and also translates to a dividend yield of 5.33 percent. Return on average equity was (ROAE) was 18.23 percent, while return on average assets (ROAA) stood at 3.71 percent, respectively.

The company’s share price closed trading at N75.54 August 12, 2014, on the floor of the Nigerian Stock Exchange, while market capitalisation was N52.42 billion.

BALA AUGIE