Energy sector fund reverts to profitability on reduced investment loss

Nigeria Energy Sector Fund (NESF) has reverted to the path of profitability as it posted a net income after tax of N32.11 million, analysis of the financial statement shows.

For the 12 months through March 2013, the company moved to a profit position of N32.11 million from a loss position of N45.80 million, in the same period of the corresponding year Q4 2013 (end March).

Based on BusinessDay analysis, the fund manager’s bottomline performance was boosted by an 81.3 percent reduction in investment loss to N27.92 million, as against N149.49 million the preceding year.

NESF said in its financial statement that the deliberate steps and strategies adopted by the fund manager prevented the Fund from closing the year with another loss, considering the unimpressive performance of the oil and gas sub-sector in the equities market.

Specifically, stocks in this sub-sector witnessed a consistent downtrend as a result of huge sell-down activities as investors’ sentiments stayed negative all through 2012. In addition, low yields on money market investments did little to improve the performance, the statement notes.

However, the passage of the Petroleum Industry Bill (PIB), which has been hanging in the National Assembly, is expected to boost investment, especially in the upstream and midstream sectors.

NESF interest income were down by 33.83 percent to N78.28 million in Q4 2014 (end March) compared to N118.30 million as at Q4 2013 (end June).

Operating expenses fell by 14.75 percent to N16 million in the review period compared with N18.77 million, as of Q4 2013.

The Nigeria fund industry has expanded by 23.6 percent to N186.5 billion going by the latest assets released by the Securities and Exchange Commission (SEC). The fund was created by the Nigerian Energy Sector Fund plc for the purpose of bridging the funding gap in the energy sector of the Nigerian economy through mobilisation of investible funds from individuals, corporate, and foreigners.

Its market price closed at N552 on the floor of the Nigerian Stock Exchange, while market capitalisation was N411.90 billion.

BALA AUGIE