Forte Oil posts N5.79 billion profit in 2015

FORTE Oil Plc has recorded a profit after tax of 5.79 billion in its 2015 operations, against N4.46 billion achieved in the previous year.

Specifically, the company’s audited result for the 2015 full year financial report showed a profit before tax of N7.01bn representing a 17 per cent increase over N6.01 per cent achieved in the previous year.

Profit after income tax also increased by 30.0per cent to N5.79 billion compared N4.46 billion recorded during the same period in 2014. The company’s revenue stood at N124.62 billion compared to N170.13billion posted same in 2014.

The board of directors have also proposed a cash dividend of N4.50 billion which will be paid to all shareholders upon the ratification of the proposal at its forthcoming yearly general meeting.

The company attributed the increase to the N9.6 billion paid so far for the major overhaul of Forte Oil’s 414MW Geregu power plant aimed at optimising and increasing its generation capacity from 414MW to 435MW(with an estimated completion date for H1, 2016).

”Forte Oil witnessed an increase in capacity utilisation at Geregu power plant however, margins reduced from 58% to 42% due to increase in gas costs cause by exchange rate fluctuations. Geregu Power Plc has declared a dividend of N2,50bn to be paid to all shareholders upon ratification of shareholders at the Company’s annual general meeting.

‘’The company’s growth in profits is attributable to the significant increase recorded in the sales of energy in the power generation segment as well as Premium Motor Spirit (PMS), Automotive Gas Oil (AGO), Aviation Turbine Kerosene (ATK) and the Production of Chemicals; Lubricants and Greases.’’

The Group Executive Director, Finance and Risk Management, Julius Omodayo-Owotuga explained that the decline in revenue was as a result of the reduction in pump price for most petroleum products largely driven by the incessant decline in crude oil prices.

He added that the company also decided to manage its foreign exchange and subsidy exposure by reducing the importation of petroleum products for the year 2015.

“Other income increased by 190% due to income from investment in securities held to maturity, freight income from the 100 trucks acquired the previous financial year and sale of investment property.

“The increase in Admin Expenses is a result of our decision to exit Dollar denominated loans and convert same to Naira at prevailing exchange rates. “Our ability to grow shareholders wealth despite the unfavourable economic environment is a testament to our belief that the business is on a solid and safe trajectory and will continue to consolidate on gains made.”

The Group Chief Executive Officer, Akin Akinfemiwa: “This result in a testing economic climate which we operate, is the reward from the investments made by the Company in its core business and its people. It also clearly demonstrates the resilience of our business.

“Furthermore, our vision to diversify into Power generation has proven to be very successful not just in the near term but in the long term and we see tremendous growth opportunities in that space. He further attributed the group’s sustained superior performance to highly motivated and skilled employees as well as excellent customer service delivery across all business lines,” He added.