BusinessDay

High cost of sales push Ardova to N4.3bn loss in nine-months

Ardova reported a loss in its nine-month financial books on the back of increased cost of sales.

The oil firm’s cost of sales climbed 37 percent to N172.8 billion in September 2022, the highest in seven years from N125.9 billion in September 2021.

Ardova’s cost of sales consists of fuels (N147.7 billion), lubricants and greases(N20.6 billion), haulage and transportation services & others (N3.1 billion), LPG and cylinder sales(N1.31 billion), and Solar system (N12.3 million).

The oil firm’s revenue grew 34 percent to N182.6 billion, the highest in seven years from N136.1 billion in September 2021.

Ardova’s cost of sales obtained 94.6 percent of its total revenue in the nine-month of this year, an analysis by BusinessDay analysis revealed.

The disaggregation of the revenue source showed fuels, lubricants, and greases contributed the most of N157 billion and N23.1 billion to the total revenue in the nine-month of this year.

Further findings showed solar systems contributed N13.15 million, haulage and transportation services & others (N909.7 million) while LPG and cylinder sales (N1.5 billion) to the total revenue in September 2022.

Ardova recorded a loss of N4.3 billion in September 2022 from N1.2 billion in September 2021.

Ardova’s distribution expenses increased by 127 percent to N4.5 billion from N1.98 billion in the reviewed period.

Personnel expenses stood at N2.48 billion in September 2022, up 52 percent from N1.63 billion in September 2021.

Ardova’s gain on disposal of property, plant, and equipment amounted to N114 million, a 409 percent increase from N22.4 million in the reviewed period.

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Investment property rental income stood at N84.8 million in September 2022, a 99 percent increase from N42.5 million in September 2021.

Net finance cost climbed to N3.2 billion, a huge 284 percent increase from N832.1 million in the comparable period.
Total assets rose to N140 billion in September 2022, up 10 percent from N127 billion in December 2021.

Ardova’s total equity dropped 25.3 percent to N12.7 billion in September 2022 from N17 billion in December 2021.

Inventories increased to N24.8 billion in September 2022, up 13.7 percent from N21.8 billion in December 2021.

Loans and borrowings increased to N48 billion in September 2022, up 8 percent from N52.1 billion in December 2021.

Net cash generated from operating activities recorded a positive cash flow of N7.8 billion from a negative cash flow of N48 million in September 2021.

Net cash generated from investing activities recorded a negative cash flow year on year of N28 billion from N3.2 billion in the period reviewed.

Net cash used in financing activities recorded N1.14 billion positive cash flow from a negative cash flow of N737.4 million in the period reviewed.

Cash and cash equivalents at the end of September stood at N9.3 billion from N4.8 billion in September 2021.

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