A double-digit increase in the cost of sales and a surge in finance cost pared profit of 11plc (Mobil) for the half-year to June 3o, the financial scorecard of the oil and gas company published on the website of the Nigerian Stock Exchange, Wednesday, show.
Despite an improvement in the company’s revenue in the period, it reported a profit of N4.173 billion, 23 percent less than it made in the same period last year.
Revenue increased by 8 percent year-on-year to N92.81 billion compared to N85.91 billion. Across all segments, income improved and the company noted an inflow of N606 million from sales of Liquefied Petroleum gas (LPG), a segment it had exited for two decades but revived last year.
The improvement notwithstanding, direct cost rose faster by 11.38 percent to N85.27 billion squeezing its gross profit which fell by 19.36 percent to N7.54bilion. Top-line was N9.35 billion in H1 last year.
Gross margin, which shows how much 11plc retained from every N100 revenue adjusted for its direct cost, fell from N10.61 in the half-year period in 2018 to N8.33 in the corresponding period this year.
In addition, income from other sources fell by 8.6 percent to N4.05 billion compared to N4.43 billion last year.
The decline in income affected operating profit of 11plc despite a slowdown in its Selling, General and Administrative expenses and an inflow from its other operating income. Operating income fell 17.8 percent to N6.38 billion.
An 82 percent slump in finance income and a significant rise in finance cost exacerbated the company’s numbers as profit before tax fell 23 percent to N6.19 billion as against N8.06 billion last year.
The oil and gas company retained N4.5asprofit from every N100 revenue in the first six months of 2019. This is N1.8 naira less than it did in the same period of 2018.
Earnings per share declined to N11.57 per share from N15.11 in the review period.
The shares of 11plc remained flat at N158 per share at the close of trading on Wednesday while the market closed 0.2 percent lower.
11 PLC markets petroleum products. The company distributes commercial and retail fuels, lubricants, grease, heavy-duty oil, motor spirit, diesel, and household kerosene. 11 PLC serves the automotive, marine, aviation, and oil industries in Nigeria.
