Conoil Plc Reports Highest Net Profit Margin in a Decade Despite Challenging 2022 Operating Environment

Conoil Plc, an oil and gas company in Nigeria, has reported a 101.95% increase in net profit for the year 2022, the highest in a decade.

The firm also increased profitability by 230 basis points, recording a net profit margin of 4.73% for the year, which is its highest in ten years. This growth was achieved despite the challenging operating environment faced by the firm during the year.

According to data obtained from the Nigerian Exchange Group, the company’s revenue grew by 3.70% to N131.42 billion in 2022 from N126.73 billion in 2021.

Despite accounting for 87.95% of the firm’s total revenue during the year, the cost-of-sales ratio reported in 2022 is the lowest in ten years, down by 324 basis points from 91.19% in 2021.

Conoil Plc’s cost of sales grew by only 0.02% to N115.59 billion in 2022 from N115.57 billion in 2021, despite the high inflation rate that Nigeria faced in 2022.

Investors King observed that the firm also reduced its distribution expenses by 4.18% to N2.29 billion in 2022 from N2.39 billion in 2021, while administrative expenses increased by 12.30% to N5.02 percent in 2022 from N4.47 billion in 2021.

Despite the high-interest rate environment brought on by the hawkish stance of the Central Bank of Nigeria to battle inflation, finance costs appreciated by 89.97% to N1.44 billion in 2022 from N758 million in 2021.

Total assets reported by the firm increased by 11.13% to N59.99 billion in 2022 from N53.98 billion in 2021, while total shareholder’s equity increased by 20.61% to N26.28 billion in 2022 from N21.79 billion in 2021. Cash and cash equivalents also surged from a negative balance in 2021 to N5.09 billion in 2022.

The oil and gas company reported a net cash flow from operating activities of N9.04 billion in 2022, up from N-4.56 billion in 2021. This indicates that the firm generated enough cash to cover its short-term obligations during the period.

Due to the purchase of property, plant, and equipment during the period, it also reported a negative net cash flow from investing activities amounting to N72 million, while net cash flow from financing activities totaled N-3.17 billion in 2022 on the back of interests and dividends paid during the period.