- Naira Devaluation Drags Japaul Into Loss
Japaul Oil and Maritime Services Plc has said its loss after tax of N22.5bn recorded for the year ended December 31, 2016 was largely due to the devaluation of the country’s currency.
In its group financial statements for 2016, it declared a loss after tax of N22.5bn compared to a loss after tax of N8.9bn in 2015.
The management of the company attributed the loss to the challenging operating landscape in 2016, exacerbated by the impact of the naira devaluation by the Central Bank of Nigeria, which amounted to foreign exchange losses arising from dollar-denominated liabilities and bank loans.
The company explained that the devaluation in the value of the naira against the United States dollar, from the CBN closing rate of N196.50:$1 in 2015 to N304.5:$1 in 2016, effectively resulted in significant foreign exchange losses accounting for over 70 per cent of the group’s losses.
It explained, “Weak economic fundamentals and its pass-through effect on the oil and gas sector with similar impact on the maritime industry, further hampered topline growth, leading to poor revenue generation for the company.
“The group’s revenue which stood at N8.14bn in 2015 dropped to N3.07bn in the review period, with gross profit falling significantly to close at a loss of N794.54m.
With the poor performance notwithstanding, the company reaffirmed that with improved business environment in 2017, the current restructuring efforts within the group evidenced by the recent sale of its foreign subsidiary and the continued support of shareholders, the fortunes of the company would be transformed.
It further stated that the repositioning initiatives being embarked upon would continue in order to achieve improvements in its underlying asset quality, cost efficiency and enhanced revenue generation across the group.