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Forte Oil Profit Rises by 30%

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Forte Oil

Forte Oil Plc recorded a profit after tax of N5.79bn in 2015, representing a 30 per cent increase over the previous year.

The company, while announcing its financial results, described the release of the full-year audited result as a feat in the history of the Nigeria Stock Exchange as Forte Oil had set a precedence by filing an approved result ahead of the regulatory deadline.

It said the board of directors had also proposed a cash dividend of N3.45 per share of the company’s common stock, which would be paid to all shareholders upon the ratification of the proposal at its forthcoming Annual General Meeting.

The company’s revenue in 2015 fell to N124.62bn from N170.13bn in 2014, while profit before income tax increased by 16.7 per cent to N7.012bn, compared to N6.006bn recorded in 2014.

Its profit after income tax increased to N5.79bn, compared to N4.46bn in the same period in 2014, while earnings per share grew by 86.8 per cent to N4.11 compared to N2.20 in the same period in 2014.

The company said its revenue fell by 25 per cent from N122.6bn in the nine months of 2014 to N91.6bn in the same period last year as a result of reduced importation of petroleum products by the company due to prolonged delays by the government in making subsidies payment and a drop in pump prices.

This, it said, was further exacerbated by nationwide strikes by downstream sector workers.

The Group Chief Financial Officer, Forte Oil, Mr. Julius Omodayo-Owotuga, said, “The decline in revenue of 27 per cent was as a result of the company strategy to reduce importation of Premium Motor Spirit so as to reduce the company’s exposure to subsidy receivables from the Federal Government.

“Other income increased by 190 per cent due to sale of investment property, investment in securities held to maturity, freight income from the investment made in the 100 trucks of the previous financial year to mention a few.”

He said the company’s ability to provide a profit for its shareholders was testament to their belief that the business was on a solid and safe trajectory and will continue to consolidate on gains made.

Also commenting, the Group Chief Executive Officer, Mr. Akin Akinfemiwa, said, “This result in a testing economic climate which we operate, is the reward from the investments made by the company in its core business and its people. It also clearly demonstrates the resilience of our business.

“Furthermore, our vision to diversify into power generation has proved to be very successful not just in the near term, but in the long term and we see tremendous growth opportunities in that space.”

He attributed the group’s sustained superior performance to highly motivated and skilled employees as well as excellent customer service delivery across all business lines.

According to the statement, Forte Oil witnessed an increase in capacity utilisation at its 414 megawatts Geregu power plant from 105MW in the nine months of 2014 to 138 MW in the same period in 2015 (276MW as at December, 2015).

“The company’s growth in profits is attributable to the significant increase recorded in the sales of energy in the power generation segment as well as Premium Motor Spirit, Automotive Gas Oil, Aviation Turbine Kerosene and the production of chemicals; lubricants and greases.

Punch

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Markets

Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd

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Oil

The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.

The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.

The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.

The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.

Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.

The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.

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Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins

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Oil Prices Recover from 4 Percent Decline as Joe Biden Wins

Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.

This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.

Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.

On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.

Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”

The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.

There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.

“Either you’re crimping energy demand or consumption behavior.”

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Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020

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Revenue of OPEC Members to Drop to 18 Year Low in 2020

The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.

EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.

If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.

The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.

It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.

It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.

“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”

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