Consumed by a loss after tax of N7.61 billion, Ardova Plc’s retained earnings for the period ended December 2022 dipped to N-1.24 billion from N6.59 billion in 2021.
The implication of this is that the oil and gas company may be unable to pay dividends, or invest in the expansion of existing business operations like increasing the production capacity of the existing products.
The loss after tax reported by the oil and gas firm was on the back of rising energy costs which marked the most of 2022 and impacted its selling and distribution costs.
Fuel (freight) cost surged by 262 percent to N5.90 billion in 2022 from N1.63 billion in 2021, bringing selling and distribution costs to N6.39 billion in 2022, 236 percent higher than N1.9 billion in 2021.
Administrative expenses also increased by 51 percent to N12.18 billion in 2022 from N8.03 billion in 2021.
Read also: Smart meters reduce energy spending for Nigerians – PPC
Furthermore, its cost of sales grew by 18.41 percent to N226.86 billion in 2022 from N191.59 billion in 2021 and accounted for 94 percent of the total revenue reported during the period. Its total revenue for the period stood at N240.81 billion in 2022, 19.54 percent up from N240.81 billion in 2021.
Revenue was primarily boosted by the 517 percent and 378 percent increase in revenue generated from haulage and transportation services and Liquefied Petroleum Gas (LPG) and cylinder sales respectively during the period.
The firm also added to its income line by growing other incomes and finance income by 144 percent and 159 percent respectively during the period. Other incomes grew to N2.12 billion in 2022 from N869 million in 2021, while finance income grew to N406 million in 2022 from N157 million in 2021.
Finance costs increased by 41 percent to N5.05 billion in 2022 from N3.58 billion in 2021, on the back of rising interest rates.
Total assets grew by 5.94 percent to N134.42 billion in 2022 from N126.88 billion in 2021, while total shareholder’s equity declined by 51 percent on the back of depleted retained earnings to N7.48 billion in 2022 from N15.31 billion in 2021.
Net cash flow from operating activities increased to N12.08 billion in 2022 from N-6.61 billion in 2021, indicating that the oil and gas firm grew its ability to generate cash from its core business activity during the period.
Net cash flow from investing activities for the period was negative amounting to N30.35 billion in 2022, driven by the acquisitions of property, plant, and equipment, right-of-use assets, software/intangible assets, and the purchase of investment properties during the period.
With the repayment of loans amounting to N11.15 billion and interest paid amounting to N8.58 billion, net cash flow from financing activities was negative in 2022 totaling N2.57 billion.
Consequently, total cash and cash equivalents for the period amounted to N-8.49 billion in 2022, from N12.83 billion in 2021.
The company disclosed in an earnings release statement said, “Ardova continues to make progress on the redevelopment of the Apapa Terminal. The redevelopment of the terminal and facilities is about 52 percent completed, and on track with expected completion of Q3 2023. A project status meeting was held in November 2022 with key stakeholders at the Apapa Terminal.”
“In 2023, we will continue to navigate the short-term challenges while striving to meet our long-term commitments, including delivering revenue growth anchored on redefining how we operate and improving the quality of our customer base, powered by all-round efficiency and supercharged by our incredible team,” Olumide Adeosun, CEO of Ardova added.