1.) Ardova Plc, previously known as Forte Oil (FO), grew profit by 31.07 percent to N176.55 billion in 2019, according to the firm’s financial statement released Thursday.
2.) The impressive topline growth rode on the back of standalone turnover of NGN53 billion in the fourth quarter of 2019, the highest in 2019.
3.) Expectedly, Fuels sales was the key driver of topline, contributing N159.25 billion (c. 90.20 percent) of gross revenue, which implies segment growth of 31.78 percent on a yearly basis and speaks to Ardova’s effective product rationalization amid the headwinds in the Nigerian downstream sector.
4.) The Lubricants and greases segment also saw improved performance annually, as sales logged a 25.71 percent expansion to pitch in at N17.25 billion from N13.72 billion in 2018.
5.) Contribution from Lubricants was relatively flat, year-on-year as it formed only 9.77 percent of revenue compared to 10.19 percent in 2018.
6.) The Solar system segment however pitched in lower than 2018, with a yearly decline of 360.73 percent to contribute a meager NGN0.04bn to topline.
7.) Liquefied Petroleum Gas (LPG) and Cylinder Sales printed a smaller NGN0.02bn. With Prudent Energy’s acquisition of a controlling stake in Ardova, the stronger LPG sales speaks to the company’s strategy to utilize a sizable number of Ardova’s retail stations to sell LPG.
8.)Analysts at Lagos-based investment bank, Meristem envisage that Ardova will seek to expand its presence in LPG, Aviation Fuel and leverage its alliance with Prudent in logistics and storage in 2020. “We therefore expect that revenue will come in at NGN197.64bn in 2020,” Meristem analysts said.
9.) The company’s Earnings Before Interest and Tax was boosted by the disposal of subsidiaries.
10.) Cost to Sales settled at 93.61 percent in 2019; an uptick from 2018 which came in at 91.59 percent.
11.) The Lubricant segment yet again, proved the most cost-effective segment of Ardova’s business, with its cost to sales coming in at 74.34 percent for 2019.
12.) Cost to Sales for the Fuels segment was 95.36%, while the Solar and LPG segments recorded 105.13% and 105.60% respectively.
13.) Overall Cost-of-Sales therefore settled at NGN165.30bn, a 33.96% YoY growth, given that it was higher than the revenue growth rate.
14.) Operating profit rose by 83.81 percent year on year to settle at NGN4.93bn, albeit spiked by Ardova’s gain on disposal of subsidiaries which came to NGN2.67bn.
15.) Finance costs rose by 35.72% to NGN4.83bn, as the company discounted its promissory notes.
16.) Return on Equity (ROE) came in at 9.82% in 2019 compared to 0.61% in 2018. Return on Average Assets (ROAA) also improved from 0.25% to 4.18%. This speaks to Ardova’s total assets shrinking from N61.20bn in 2018 to N49.60bn in 2019, following the company’s divestment from its subsidiaries.
17.) Total Debt ratio came in at 11.68 percent as against 37.63% in 2018 as no term loans or borrowings were recorded in the year.
