Conoil Nigeria Plc: Innovative product underpins profit

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Investors crave for a company with strong earnings and attractive valuation. This is because they expect to be paid bumper dividend, the reward for taking risk in the entity; after all they could have invested the money in other ventures.

Concoil Nigeria Plc, a major player in the downstream oil and gas industry just released its first quarter financial statement that showed improvement in key performance ratios.

The stellar performance means the company has bolstered the optimism of investors because it isn’t easy to thrive in a harsh and unpredictable macroeconomic environment.   

Nigeria’s economy has been growing sluggishly since the country exited its first recession in 25 years in 2017 as GDP expanded by expanded by 2.01 percent in the three months through March from a year earlier. That compares with 2.4 percent expansion in the fourth quarter.

Inflation rate was 11.40 percent in May, a figure that is higher than the 6 percent and 9 percent central bank target range.

Unemployment rate is at an all time high of 23 percent, as the country dethroned India to become the poverty capital of Africa.

The country’s decrepit infrastructures such as the menacing Apapa gridlock and bad roads has continued to undermine the growth of downstream oil and gas firms that incur additional haulage cost.

Oil marketers are grappling with huge debt brought on by delay in the payment of subsidy arrears by the Federal Government. Consequently, a lot of firms are unable to settle outstanding salaries of workers and pay interest on money borrowed from banks.

Amid these monumentalor or huge challenges, Conoil continues to thrive as it recorded double digit growth in revenue and profit, while it maintains a solid working capital position.

Conoil reported a 13.85 percent increase in revenue to N35.63 billion in … Read More...

Conoil Q1 profit surges to highest level in 5 years

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Conoil, a listed oil and gas company, has announced a 53.9 percent increase in its profit for the first quarter of 2019. This increase pushed the company’s net profit to the highest level in the last five years.

The company on Wednesday reported that it made N325.18 million as profit in the first quarter, up from N211.295 million made a year earlier. The increase was driven by improvements in Conoil’s revenue and cost management.

In the quarter, Conoil recorded revenue of N35.64 billion from the sales of petroleum products, representing 13.8 percent more than the oil company made in the corresponding period of 2018.

Conoil makes its revenue from three segments namely; White products, Lubricants and Liquefied Petroleum Gas (LPG).

White products segment involves the sale of Premium Motor Spirit(PMS), Aviation Turbine Kerosene (ATK), Dual Purpose Kerosene (DPK), Low-pour Fuel Oil (LPFO) and Automotive Gasoline/grease Oil (AGO). In Q1, White products contributed 95 percent to revenue while Lubricants accounted for the other 5 percent.

Despite the double digit growth in revenue, cost of sales rose 15 percent to N32.68 billion paring Conoil’s gross profit in the quarter. As a result, top-line shrunk to N2.96 billion, down from N3.06 billion in Q1 2018.

Conoil’s other operating income fell to N30.9 million, 68 percent less than N96.42 million previously earned.

However, the oil and gas company was able to reduce its cost in the period which translated to improved earnings. In the period, distribution expenses fell by 31 percent and the company was able to cut down administrative expenses by 7 percent, while finance cost declined some 4 percent.

Consequently, Conoil was able to post a profit before tax of N478.202 million in Q1 2019 as against N310.730 million in the same period of 2018. The company … Read More...