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Conoil whets shareholders appetite with 255% half year profit

By on September 2, 2013

By declaring a 255 per cent increase in profits in the first half of the year, Conoil Plc has further raised investors’ appetite in its stocks, reports Festus Akanbi

That the times are indeed bad, in the economic scene is a fact acknowledged world-wide. The story is not in any way different in Nigeria. For operators in the downstream petroleum sector of the economy, these are not the best of times. Little wonder that when Conoil Plc submitted its unaudited 2013 half year result on the floor of the Nigerian Stock Exchange (NSE) recently, the investing public heaved a sigh of relief.

The oil marketing giant recorded 255 per cent increase in profit after tax from N450.9 million in 2012 to N1.6 billion in 2013, while profit before tax rose by 199 per cent from N663.1 million to N1.98 billion, with a promise to sustain and improve on this performance at year end.
Its Earnings per Share (EPS), which measures the net income for every shareholder, increased from 65kobo to 230 kobo.

The result clearly demonstrated Conoil’s resilience to respond to the volatility in the downstream sector.

In a statement released by the company to buttress its determination to remain investors’ delight, the company said: “Our half year strong performance prepares us well for the increasingly fierce competition in the industry. We will continue to transform our business and the way we interact with our dynamic marketplace.”

Conoil added that the downstream remains fundamentally attractive now and for the medium and long term. “With our clarity of direction and focus, our company’s long-term success is assured. We will sustain our improved performance and realise our aspiration to become the leading petroleum products marketer and one of the most profitable quoted companies.”

On its plans and projections to improve on its half year result, the company said: “We will consistently pursue initiatives that will enable our brands, processes and people drive our corporate vision and ultimately drive value for our shareholders. We will continue to benchmark our company against the best global standards and practices to ensure that the business is managed in the best interest of all stakeholders.

“Fresh initiatives to strengthen our income base in the core segments of the business will be pursued pro-actively capitalising on every emerging opportunity in the sector.”

Reputable for achieving increasingly favourable balance sheet since its privatisation in 2000, Conoil has hinged its projected growth for 2013 on 65 per cent revenue increase from its retail outlets spread across the country.
The company expressed its determination to push massive sale of white products particularly through its recently commissioned mega stations to significantly increase its turnover and by extension, its profit.

The company has also projected a 72% increase in revenue from the fully-deregulated, margin-driven lubricant business. It would be recalled that in anticipation of a good financial year, the company early this year strategically launched range of are now widely acclaimed as quality lubricant products. The engine oil brands are reportedly enjoying wide acceptance in the lubricant market-space.

A surge in Conoil’s exports of its lubricant brands to the West African market, following the company’s admittance into the ECOWAS Trade Liberalization Scheme (ETLS), is also projected to add to its revenues. The ETLS admission qualified Conoil to participate in ECOWAS Export Expansion Grant Scheme (EEG) and allowed the company to enjoy at least 30 percent rebate on its yearly export earnings, thus boosting profit.

The company has also entered into joint venture partnerships with leading car manufacturing companies in the country for the use of Conoil lubricants in their vehicle engines.

Added to this, is the expected new incomes stream from ancillary services. The company said it had pumped huge investment in the marketing of Low Pour Fuel Oil (LPFO) and Bitumen in the first half of 2013 and will now boost its bottom-line in the second half of the year.

Growth in sales is also expected from Liquefied Petroleum Gas (LPG), popularly known as cooking gas, following expansion in distribution networks and deployment of innovative marketing strategies.

Conoil expects to leverage on its market leadership in the aviation business to boost income. The company boasts of having the largest spread of aviation fuelling stations nationwide, with world-class facilities. Its clientele, which includes world’s leading airlines, has continued to grow.

Capital market analysts and other financial experts have identified Conoil as a company with immense potentials for sustainable growth. Only recently, Nigeria’s apex capital market regulator, the Securities and Exchange Commission (SEC) recommended Conoil stocks for investors who wish to engage in margin lending activities.

This was an official endorsement that company possesses enough liquidity and fundamental strengths for its shares to serve as margin securities.

While promising its investors to continue to maintain the competitive edge in the downstream oil sector, Conoil said: “Its human capital resources remained its source of strength. We continually recruit, develop and retain the right mix of talented people who are aligned with our values and who can drive our plans for growth.”

“We remain committed to training and re-training, as well as promoting enabling environment where excellence is rewarded and leadership is determined by merit,” it added.



[This Day