Mobil Oil Nigeria Plc has attributed the decline in its 2012 profit after tax to four key factors which include loss of sales in January as a result of the protests which followed the fuel subsidy reduction and security issues which affected its business in some parts of the country.
The company’s profit after tax declined by 29 percent to N2.9 billion, compared to N4.1 billion in 2011, while turnover rose 30 percent to N80.8 billion, mainly due to premium motor spirit (PMS) price increase which did not provide for any margin increase.
Other factors said to have contributed to the drop in profit were supply constraints and stock-out of key lubricant products as a result of change in formation and closure of its Apapa Terminal PMS-pipeline for scheduled maintenance leading to loss of the depot margin.
Adetunji Oyebanji, the company’s chairman and managing director, said at the Annual General Meeting last week: “2012 was a particularly difficult year for business in Nigeria and the operating climate affected our company and indeed the entire business community in the country.”
He noted that the major challenge in the company’s portfolio continued to be the fuel products, adding that a squeeze on bank credits tightened product supplies as fuel importers were not able to raise finance to bring products into the country.
Continuing, he said: “The controlled margins on PMS sales are barely sufficient to cover operating costs. Until we get appropriate returns and the industry is fully deregulated, the entire fuel sector will continue to lack the level of investments required to realise the enormous potential inherent in the sector for meeting the country’s energy demands and stimulating economic growth.”
The company declared a dividend of N1.8 billion (500kobo per share) for its shareholders, which represents 47 percent of the profit after tax for the year and an increase of 20 percent over last year, after allowing for the bonus issue.