By Nse Anthony-Uko
(Sundiata Finance) – Forte Oil Plc has recorded an increase of 84 per cent in its net profit for the second quarter unaudited result for the period ended June 30, 2017. In the company’s result released to the investing public on the Nigerian Stock Exchange (NSE) showed its profit before tax increased slightly to N4.74 billion from N4.26 billion, even as net profit rose by 84 per cent from N2.23 billion to N4.11 billion.
Meanwhile, the company’s revenue for the period dropped by 22.23 per cent from N84.42 billion in the first half of 2016 to N65.65 billion, cost of sales dropped to N53.46 billion, while the gross profit for the period stood at N12.18 billion, which was slightly up from the previous N12.36 billion in 2016.
Other income dropped to N1.01 billion, from N1.61 billion, helped by the foreign exchange gain of N541.78 million, rising from N271.4 million, just as distribution expenses reduced by 47.71 per cent, while administrative expense fell to N4.61 billion from N5.31 billion, leaving operating profit at N7.63 billion, compared to the previous N6.85 billion.
Finance income increased from N811.17 million to N1.05 million, of which interest income on bank deposits increased to N584.27 million from N312.33 million, while income from government grant on loan rose to N227.02 million from N174.89 million. Finance cost was slightly higher at N3.95 billion, with interest on medium term bond stood at N835.49 million, same as prior half year, just as interest expense on bank loans and overdrafts stood at N3.11 billion, down from N3.4 billion in the first half of 2016. Net finance cost stood at N2.89 billion from N2.58 billion.
The group executive director, Finance and Risk Management of Forte Oil, Mr. Julius Omodayo-Owotuga recently identified the company’s five growth pillars aimed at driving revenues and enhanced value creation to all its stakeholders.
According to him, the company will focus on high margin businesses such as lubricants, Liquefied Petroleum Gas (LPG) and power to drive revenue generation. He said that the company would also strengthen its balance sheet through enhancement of working capital and efficient management of inventory and trade account receivables.
The executive director said that the company was looking at the right offshore asset to acquire at the right price to increase market share. He said that the company would optimise distribution channels as well as partner with telecommunication firms and financial institutions for effective distribution of its services.
Omodayo-Owotuga stated that Forte Oil would focus on mergers and acquisitions within the industry to increase its downstream business, saying that the company would continue to strengthen its power business. The management of Forte Oil Plc said that the company will raising the sum of N20 billion from the equity market to support operation and drive diversification strategy.