• Sunday, February 25, 2024
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For Conoil shareholders… it is a promise kept


To the teeming shareholders of Conoil plc, the proposed payment of N4 per share for every 50 kobo share is a promise kept by the petroleum products marketing company, after posting impressive performance across its business segments in the financial year ended December 2013.

The company will next week Tuesday, at its annual general meeting, seek its shareholders approval to pay the proposed N4 per share dividend.

The share price of Conoil, which is listed as a petroleum and petroleum products distributor in the oil and gas sub-sector of the Nigerian Stock Exchange (NSE), closed last week at N47.99 kobo.

Recall that Mike Adenuga, chairman, Conoil plc, had while addressing the shareholders at the company’s 43rd annual general meeting held in October 2013, assured investors that the company remained committed to maintaining its leadership position in the downstream petroleum sector by growing its business and creating an enduring value for its shareholders and other stakeholders.

Conoil current full-year results released at the NSE showed that revenue grew by 6.4 percent to reach N159.54 billion, as against N149.99 billion posted in 2012. Gross profit rose to N17.04 billion, which represents over 5 percent rise above the previous year’s.

The company also posted 289 percent increase in profit before tax (PBT) from N1.15 billion in 2012, to N4.58 billion, while it recorded profit after tax (PAT) of N3.07 billion, which amounts to 330 percent increase over what was posted in 2012. The report also showed a stronger balance sheet as retained earnings boosted shareholders’ funds to N18.04 billion in 2013, compared with N15.66 billion in 2012.

Analysts had said the impressive dividend and profit and loss accounts performance were in line with market’s expectations given Conoil’s consistent growth over the years.

The company attributed the great financial outing to improved cost efficiency, significant reduction in interest expense and a strong hold on cost of sales.

The company added that its performance was driven by revenue increase from its nationwide retail outlets, especially its newly commissioned mega stations. It was also augmented by additional income streams from its world-class quality lubricant products.

He had said: “We are building stronger financial position and creating enduring value for our shareholders. We will constantly develop strategies to sustain our position as the only marketer that always goes the extra mile for our ever-growing customers, with total commitment to excellent service delivery.”

Elaborating on the strategies to be adopted to achieve the set target, Adenuga revealed that the company had strengthened and consolidated its leadership position in the aviation business with investment in the acquisition of new world-class equipment to meet the demands, on real time basis, of the company’s ever-growing local and international clientele.

“Our strategy in retail is to provide top quality products and services that will make customers want to always patronise us for their fuel and non-fuel needs. We are not resting on our oars on our aggressive acquisition and expansion drive that aims at increasing, substantially, the number of our retail outlets nationwide,” Adenuga had stressed, adding, “Conoil’s future is rosy because the company is constantly thinking ahead and acquiring additional capacity that is necessary for growth and profitability, despite the unpredictability of the economic environment.”

Conoil said recently in a statement that it stepped up engine oil export to West African markets as well as entered into joint venture partnerships with leading car manufacturing companies, adding that its income was also bolstered by ancillary services including marketing of Low Pour Fuel Oil (LPFO). It would be recalled that the oil products marketer had shown signs of a sound financial year after posting 341 percent increase in profit before tax while its profit after tax went up by 329 percent in the third quarter of 2013.

In his comments on the results, the chairman said the company had consolidated its competitiveness in the different segments of the business. “We also pursued and sustained strategic expansion of our retail network across the length and breadth of the country with a view to ensuring that a lot more people, especially in the remotest parts of the country, have access to our superior products and services,” he said.

While assuring the shareholders that Conoil is equipped with all the essential materials, intellectual and human resources, to surmount the challenges ahead in the downstream petroleum sector, Adenuga said that the company had been positioned to take full advantage of opportunities that could arise from the Federal Government’s economic reforms, by leveraging on the solid base built over the years.

“Greater attention will be devoted to cutting operational costs in the different segments of the business, while still maintaining and improving on the quality of our products and services. With renewed commitment, we will explore developing and emerging markets, even as we continue to build on our strengths in areas where we perform well, with good growth and profitability,” Adenuga said.

The oil-products marketer had shown signs of a sound financial year after posting 341 percent increase in profit before tax while its profit after tax went up by 329 percent in the third quarter of 2013.

The company was simply reaping from the fruit of strategic planning embarked upon in recent times. At the beginning of 2013, Conoil had launched the second phase of its comprehensive four-year expansion plan started three years ago, with the commissioning of new ultra-modern retail outlets spread across the country. It had earmarked about N4.8 billion for the project targeted at growing the company’s sales and revenue by over 65 percent.

It also embarked on the plan to adequately prepare for industry-specific challenges, ensure impressive growth in its performance indicators and consolidate its leadership position in the downstream petroleum business.

The company had commenced the ambitious plan with the upgrade of its storage tanks at the company’s depots nationwide to accommodate bulk product imports.

In pursuant of this, the company increased the storage tanks for white products – Premium Motor Spirit (PMS), diesel and kerosene – to 80,000 metric tons, to double the capacity of its storage facilities at its Apapa installation.

Another major plank of the expansion programme was the construction of the company’s multi-billion naira Port Harcourt depot, which has the capacity to hold 70,000 metric tons of various petroleum products with the propensity to dispense 5.5 million litres per day. The Port Harcourt depot complements the company’s flagship installation in Apapa, Lagos, providing easy access to fuel imports and easing the pressure on available jetties and other port infrastructure in Lagos.

Conoil, which controls about 30 percent of the nation’s lubricant market, has also committed substantial investments to upgrade and expand its lubricant blending plants at its depots at Apapa, Lagos, Port Harcourt and Kano, with a view to meeting and surpassing customers’ ever increasing demand for its quality engine oil.

The company’s lubricant business received a major boost during the financial year under review, when it was admitted into the ECOWAS Trade Liberalisation Scheme (ETLS), which afforded it the opportunity to export its high grade, proudly made in Nigeria motor engine oils to established markets in the sub-region duty free.

The ETLS was adopted by ECOWAS member states to eliminate trade barriers and facilitate trade integration, improve the foreign exchange earnings of companies of member states and create more jobs in their respective countries.

Also, the company, through innovation in the production and distribution of Liquefied Petroleum Gas (LPG) from the state-of-the-art LPG bottling plant located in Ikeja, Lagos, launched itself as a leader in the provision of services that are of world-class standards to consumers.

Iheanyi Nwachukwu