Forte Oil Records N3 Billion Profit After Tax in Nine Months

Integrated energy company, Forte Oil Plc, has reported a profit after tax (PAT) of N2.8 billion for the nine months ended September 30, 2016, showing a decline of 34.7 per cent compared to N4.3 billion in the corresponding period of 2015.

Although the company’s top lines showed growths, higher cost of finance and tax expenses compressed the bottomline.

Forte Oil Plc recorded a gross revenue of N121.1 billion in 2016, showing an increase of 32.2 per cent from N91.6 billion in 2015. Cost of sale rose by 34.3 per cent from N78.6 billion to N105 billion, while profit before tax (PBT) stood at N15.5 billion, showing an increase of 19.4 per cent.

The company was able to keep operating expenses flat at N9.9 billion, against N10 billion in 2015. While other income fell by 13.9 per cent from N2.7 billion to N2.3 billion,

net finance cost soared by 663 per cent to N2.2 billion.Consequently, the company ended the nine months with profit before tax (PBT) of N5.6 billion, from N5.3 billion in 2015. However, tax expenses rose by 182.6 per cent from N1.0 billion to N2.8 billion, hence PAT fell to N2.8 billion, down from N4.3 billion.

The company had posted a growth of 31 per cent in PBT for the half year (HI) ended June 30, 2016. Explaining the HI performance Group Chief Executive Officer of Forte Oil, Mr. Akin Akinfemiwa, had attributed it to aggressive sale drive, strategic retail acquisition, and prudent approach to cost containment.

According to him, HI revenue grew as a result of ongoing strategic retail acquisitions across the country, increase in pump price of premium motor spirit and increased commercial customer base for both fuels and lubricants.

He explained that the power business contributed five per cent to revenue of the group and 15 per cent to PBT as a result of low generation due to ongoing overhaul project and gas supply constraints due to the security challenges in the Niger delta region.

Looking ahead, the Forte Oil boss had said the company would focus on high margin products, fully exploit LPG business particularly, LPG retailing, bottle refilling, optimize and expand Geregu Power Plant Asset, diversify into upstream space through profitable acquisition of upstream assets and uptmising working capital structure.

“Also in the second half of 2016, we shall focus on increased supply of petroleum products imports as full deregulation kicks in and forex availability increases,” Akinfemiwa said.