Conoil Plc, one of the leading petroleum products marketing firm, last week announced its audited results for the year ended December 31, 2015. The results came in late considering the fact its peers have declared their performances for the 2015 and have also released the results for the half year ended June 30, 2016.
No doubt the shareholders of Conoil had waited for a long time to know their fate in terms of dividend. But given the results released by the company last week, the shareholders did not wait in vein. Conoil Plc posted improved bottom-line and recommended a dividend of 300 kobo per share, which is 200 per cent above the 100 kobo paid in 2014.
Conoil Plc (formerly National Oil and Chemical Marketing Plc) was incorporated in 1960 as a private limited liability company. The company was converted to a public company in 1991. In the year 2000, the Federal Government of Nigeria through the Bureau of Public Enterprises (BPE) bought 40 per cent issued ordinary shares of the company held by Shell Company of Nigeria (UK) Limited. Following its privatisation, Conpetro Limited acquired 60 per cent of the shares of the company. As a result of a rights offering by the company in 2002, Conpetro Limited now holds 74.4 per cent while members of the Nigerian public hold the remaining 25.6 per cent stake in the company. Conoil Plc has Dr. Mike Adenuga (Jr) as chairman while Mr. Tejbir Singh Sawhney is managing director. Executive directors are: Mr. WasiuAdeyinkaAdebiyi, Mr. Akin Fabunmi and Miss Abimbola Michael – Adenuga. Other directors include: Dr. M. E. Omatsola; BabatundeOkuyemi; Mr. Mike Jituboh and Mr. Ike Oraekwuotu.
The audited results of the company for 2015 beat the expectation of the market. Although revenue fell by 35.4 per cent to N82.9 billion, from N128.4 billion in 2014, profit after tax soared by 176 per cent to N2.308 billion, from N834 million in 2014.
An analysis of the results showed that apart from the fact Conoil Plc adopted cost containment strategies to improve bottom, other income and foreign exchange gains contributed significantly to the profit.
The company reduced cost of sale from N114.5 billion to N71.4billion, while administrative expenses was reduced from N8.2 billion to N6.8 billion. Cost of finance rose from N2.3billion to N3.8 billion. However, Conoil Plc realised N2.718 billion other income. This is in respect of interest income on delayed subsidy payments represents net interest cost claims received from PPPRA arising from delayed subsidy payments relating to products imported. Similarly, the company realised N2.53 billion from exchange gain.
Consequently, the company ended the year with profit before tax of N3.448 billion, as against N1.532 billion in 2014 and profit after tax of N2.3038 billion, up from N834 million in 2014.
Following this impressive performance, the company has proposed a dividend of N2.08 billion, translating to 300 kobo per share compared with the 100 kobo paid in 2014.
Conoil attributed the improved performance to efficient management of resources, effective cost control policy, as well as reaping from its huge investment in the expansion and upgrade of its facilities.
“For us, the downstream sector remains fundamentally attractive and viable today and the future. With our clarity of direction and focus, our company’s long-term success is assured. We will sustain this improved performance and vigorously pursue our aspiration to remain the nation’s leading petroleum products marketer and one of the most profitable quoted companies,” the company said.
The Chairman of Conoil, Adenuga Jr, had last year assured shareholders that notwithstanding the tough challenges in the country and indeed in the downstream petroleum sector, the company would explore to the fullest, new opportunities that abound in the industry to its advantage and deliver higher returns.
Adenuga also assured investors of the company’s commitment to cost cutting measures in its operations, vast improvement in the quality of its products and services with a strong bottom-line as its focus.
“These measures have positively contributed to our successful outing to reward our loyal shareholders,” he said.
Gearing up for challenges
Realising the fact that the years ahead portend greater challenges in the downstream petroleum sector and demand pragmatism on the part of the players in the industry, Conoil Plc is gearing up for the anticipated challenges and opportunities.
The company has stepped up investments in the core segments of the downstream business with a view to consolidating its competitive edge and breaking new grounds to further boost its market share.
The strategic investment project entails upgrading and construction of facilities in the priority areas, such as retail, lubricants, aviation and specialised products, so as to provide additional capacity that will enable it to meet the long-term needs of its growing business.
According to Conoil, the focus of the initiatives being pursued is to deepen the company’s market penetration and establish new streams of income to further strengthen its competitive edge.
Adenuga has consistently expressed the determination to sustain the culture of taking advantage of opportunities in the emerging markets and organising efforts and resources along enduring strategies for top performance.
“There is an ongoing review of our business processes to boost commercial, innovation and supply chain efficiencies, to improve focus on growth opportunities and to enhance competencies that will drive accelerated progress,” he said.
Conoil’s state of the art facilities at its depots in Lagos and Port Harcourt give it significant leverage in storage and blending of products, in conformity with the world’s best industry practices. The depots ensure availability and prompt delivery of products and services to customers nationwide.
In Port Harcourt, the company regularly augments its storage capacity for different products to meet the demands of customers in the south-south, south-east and the northern regional markets. This has improved throughput at Port Harcourt and also saved transportation time and cost of moving products from Lagos to these areas. Similarly, a new full-fledged depot in Calabar is well under way, which would have storage tanks for aviation turbine fuel (ATF), automotive gas oil (AGO) and premium motor spirit (PMS). According to the company, the depot would also have hi-tech loading gantries with allied facilities of international standard.
Besides, as part of efforts to boost its bottom-line, Conoil has also repositioned its lubricants business, building two additional oil blending plants in Apapa, Lagos and another one in Port Harcourt, all of which the management said had pushed up its production capacity significantly.
The company also introduced into the market, a new brand of engine oil called Okada Golden Super which is manufactured specially for 4-stroke motorcycles and tricycles.
Conoil also consolidating its stronghold on the aviation fuel marketing business in terms of spread, storage capacity and maintenance support.
The company said major airlines plying the Nigerian airspace have been taking full advantage of the unique services.
“Its impressive storage facilities give the company unmatched capacity to meet the needs of local and international customers. The hi-tech bowsers as well as quality product and service delivery, which are of essence in the industry, are some of the reasons the Conoilcontinues to attract the best of clientele in that sector,” the company said.
There have also been increased investments in the retail segment as the company is currently upgrading over 400 filling stations across the country, while plans are on to acquire another 250 stations that would significantly boost its retail network. Apart from the ongoing project of building one mega station in each state capital, it has sustained its special university campus scheme, under which retail outlets are being located on the campuses of designated universities and polytechnics across the country.
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