- Forte Oil Grows Profit by 98% to N1.9bn in First Quarter
The hope of shareholders of Forte Oil Plc to receive dividend at the end of the current financial year has brightened as the company reported improved results for the first quarter(Q1) ended March 31, 2017.
Shareholders of the oil firm did not receive any dividend for 2016 due to a 50 per cent decline in its profit. However, going by the Q1 results, there is light at the end of the tunnel. Forte Oil reported a profit after tax (PAT) of 1.9 billion in Q1 of 2017, showing a jump of 98 per cent from N1.0 billion recorded in the corresponding period of 2016.
In all, Forte Oil recorded a revenue of N33 billion, down 7.3 per cent from N35.67 billion. Cost of sales was reduced by 11.7 per cent from N30.8 billion to N27.2 billion, while distribution expenses was reduced by 45 per cent from N911 million to N501 million, leading to a growth of 20.8 per cent in gross profit to N5.8 billion, from N4.8 billion in 2015.
Operation expenses declined by 9.8 per cent to N2.8 billion, from N3.1 billion, net finance cost rose by 37 per cent from N1.1 billion to N1.6 billion. The company posted post tax profit of N2.0 billion, up 57.5 per cent from N1.3 billion. A reduction in tax by 52 per cent from N300 million to N200 million made the profit after tax to grow fast to N1.9 billion in 2017, compared with N1.0 billion in 2016, showing a jump of 97.5 per cent.
In bid to reduce its finance cost, Forte Oil Plc last year raised N9 billion bond under its N50 billion bond issuance programme, to refinance existing short term commercial bank loan obligations. The funds were also meant to refinance its retail outlet expansion.
The Group Chief Executive Officer, Forte Oil, Mr. Akin Akinfemiwa had said: “With the raising of this initial capital which has been fully underwritten shows the confidence the investing public has in Forte Oil Plc as an investment of choice. This bond programme being the first in the downstream sector, is testament to Forte’s position within the downstream sector and allows the company to actualise the vision of the Board to continue to provide value to its shareholders regardless of the economic climate.
Also speaking on the bond issuance, the Group Executive Director, Finance and Risk Management, Forte Mr. Julius Omodayo-Owotuga said: “This series provides us with the necessary liquidity to actualize our growth strategies and positions the company for the years ahead. The pricing of this debt instrument demonstrates the markets’ belief in us and the pricing would help reduce our borrowing cost and increase profitability in the short and long term.”