Conoil – Price adjustment generates revenue and profit

Unaudited result and financial statements Conoil Plc for the period ended December 31, 2021 recorded modest revenue growth, impacted by the price adjustment of white goods.

The oil marketing company has identified itself in three reportable segments which include white goods, Lubricants and Liquefied Petroleum Gas (LPG).

The White Goods segment is involved in 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).

The Lubricants segment products are transport lubricants, industrial lubricants, greases, process oils and bitumens. The products marketed in the LPG segment are Liquefied petroleum gas – Mass, Liquefied petroleum gas – Gaskets, cylinders and valves.

According to National Bureau of Statistics (NBS) the average price paid by consumers for PMS increased by 0.04% over the year[1]annual basis at N165.77 in December 2021 compared to N165.70 in December 2020.

The Bureau also revealed that the average retail price of automotive diesel paid by consumers increased by 28.97% on an annual basis, from a lower cost of N224.37 per liter recorded in the corresponding month of last year at a higher cost. of 289.37 N per liter in December 2021.

Conoil’s revenue from the sale of petroleum products in 2021, the unaudited results increased by nearly 8% to 126.7 billion naira from 117.47 billion naira in 2020.

White goods revenue contributed 92% or N116.97 billion in 2021, compared to 93% or N109.56 billion for white goods the previous year.

Lubricants, out of revenue of N126.7 billion in 2021, contributed 8% or N9.73 billion, while lubricants in 2020 contributed 7% or N7.91 billion in 2020.

Cost of sales (CoS) increased by 7.03% to N115.22 billion in 2021 from N107.65 billion in 2020 to bring Conoil’s CoS/Revenue at 90.9% in 2021 versus 91.6% in 2020.

income interaction

The interaction between revenue and CoS positioned gross profit at N11.48 billion in 2021, an increase of 17% from the N9.82 billion reported in 2020.

Other operating income closed 2021 unaudited at N296.24 million from N151.7 million in 2020, driven by a 494.8% increase in rental income which closed 2021 at N123.6 million. naira from 20.8 million naira in 2020, while service revenue increased from 109.1 million naira in 2020 to 172.64 million naira in 2021.

The company reported a 0.4% decline in total operating expenses to N7.22 billion in 2021 from N7.25 billion in 2020, due to lower administrative expenses.

Conhuile recorded a 0.72% decline in administration expenses to N5.15 billion in 2021 from N5.18 billion in 2020, while distribution expenses which include transportation expenses and marketing expenses increased by 0.3% to 2.08 billion naira in 2021 from 2.07 billion naira in 2020.

Finance charges for the period increased by 8% to N760.6 million in 2021 from N704.57 million in 2020.

Interest on bank overdraft closed 2021 at 753.8 million naira in 2021 from 700.5 million naira in 2020, with accretion expenditure dropping from 4.04 million naira in 2020 to 6.8 million naira naira in 2021.

According to the company: “Bank overdrafts are repayable on demand. The average effective interest rate on bank overdrafts is approximately 14% (2020: 15.5%) per annum and is determined on the basis of NIBOR plus the lender’s profit margin.

“The overdraft was necessitated by the delay in payment of pending federal government subsidy applications on the import/purchase of products for resale pursuant to the provisions of the Petroleum Support Fund Act for regulated petroleum products.”

In total, the company recorded a 76.6% increase in pre-tax profit to N3.79 billion in 2021 from N12.14 billion in 2020.

Profit for the period also increased by 111.1% to N3.04 billion in 2021 from N1.44 billion in 2020.

The increase in earnings impacted earnings per share which increased from N4.38 in 2021 to N2.08 per share in 2020.

The company, in its unaudited results, did not declare a dividend payout to shareholders, but it has maintained the payout of dividends to shareholders since 2001.

However, during the 2020 financial year ended December 31, 2021shareholders of Conhuile received a dividend of N1.04 billion. The dividend, which translates to N1.50 kobo per share, was recommended following the publication of audited results of the petroleum products marketing company.

The oil marketing giant had announced a final dividend payment of N2.00 per ordinary share of 50 kobo each for the period ended December 31, 2019.

Customers and other debtors

Conhuile in its unaudited results and accounts, total assets exceeded N50 billion, due to a 12.2% increase in trade and other receivables to N34.29 billion in 2021 from N30.57 billion naira in 2020.

Meanwhile, the company’s total assets increased by almost 10% to N53.69 billion in 2021 from N48.86 billion in 2020.

Total non-current assets fell by 22% to 3.85 billion naira in 2021 from 4.94 billion naira in 2020, while total current assets which includes trade and other receivables increased by 13, 5% to reach N49.84 billion in 2021 from N43.93 billion in 2020.

Total equity increased by 10.24% to 21.52 billion naira in 2021 from 19.62 billion naira in 2020, mainly due to retained earnings which appreciated by 13% to 17, 3 billion naira in 2021 compared to 15.35 billion naira in 2020.

Total non-current liabilities increased from N964.79 million in 2020 to N1.01 billion reported in 2021, while total current liabilities increased by around 10% from N28.4 billion. naira in 2020 to 31.16 billion naira declared in 2021.

Maintaining the leadership position

Meanwhile, the management of Conhuile reiterated its determination to maintain its leadership position in the downstream oil business by building a stronger financial position and creating higher values ​​for its shareholders.

The company has assured its shareholders that conscious efforts will be directed towards better execution of value-added products and services, particularly in the areas of marketing and customer management.

While noting the challenges ahead given the current state of the national economy, he however expressed optimism that he would strive to maintain profitability.

Spurred by words of encouragement from shareholders after the meeting ratified a total cash dividend payment of 1.04 billion naira, translating to 150 kobo for every 50 kobo share held, the company pledged to explore opportunities in the coming years to deliver strong financial results and increase competitive returns on its shares.

President, Conoil Plcdr. Mike Adenuga (jnr), said during his speech at the company’s annual general meeting (AGM) that the company was fully responsible for consolidating its competitiveness in the various segments of its business by exploring and developing emerging markets while maintaining its positions in areas where it has a competitive advantage.

He suggested that with the changing dynamics of the downstream oil industry, Conhuile was able to ensure an improvement in its overall performance which would result in the satisfaction of the expectations of all its stakeholders.

“We plan to build on the progress made in previous years to deliver a strong and sustainable performance that enhances returns for our shareholders,” Adenuga said.

“Our overriding objective is to ensure the continued delivery of excellent service to our customers. The company will increase its profits, improve its profitability and the quality of its assets, and provide competitive returns to our esteemed shareholders,” the Chairman added.

Copyright this day. Distributed by AllAfrica Global Media (allAfrica.com)., source English press service

Eleanor C. William