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It’s Bumper Harvest for Conoil Shareholders

 Mike-Adenuga-0909.jpg - Mike-Adenuga-0909.jpg

By the time the shareholders of Conoil Plc converge for the company’s annual general meeting on September 30, one of the issues that will put smiles on their faces is the approval of a generous dividend payment by the board, reports Festus Akanbi

The board of Conoil Plc has recommended total payment of N2.78 billion to shareholders as cash dividend as the leading petroleum-marketing company grew profit to N4.6 billion in 2013.
The recommendation was contained in the audited report and accounts of Conoil Plc for the year ended December 31, 2013 submitted recently to the Nigerian Stock Exchange (NSE).

The dividend payout, which represents 300 per cent increase over the N1.00 on every 50 kobo ordinary share paid in the previous year, is a corollary of the strong performance posted by the company during the financial year in review, where the year as net earnings per share, (EPS), which measures the net income for every shareholder, also rose by 329 per cent; from 103k to 442k.
Conoil’s current full year results showed that the company maintained its leadership position in the industry, reaping bountifully from the huge investments in its business portfolios.
The company recorded a turnover of N159.54 billion, profit before tax of N4.58 billion, while the profit after tax was put at N3.07 billion.
Revenue grew by 6.4 per cent to reach N159.54 billion as against N149.99 billion posted in 2012. Gross Profit shot up to N17.04 billion, which represents over 5 per cent rise above the previous year’s.
The company also posted 289 percent increase in Profit Before Tax from N1.15 billion in 2012 to N4.58 billion, while it recorded Profit After Tax of N3.07 billion, which amounts to 330 per cent increase over what was posted in 2012. The report also showed a stronger balance sheet as retained earnings boosted shareholders’ funds to N18.04 billion in 2013 compared with N15.66 billion in 2012.
Market analysts said the impressive dividend and profit and loss accounts performance were in line with market’s expectations given Conoil’s consistent growth over the years.
The company in a press statement, attributed the great financial outing to improved cost efficiency, significant reduction in interest expense and a strong hold on cost of sales.
The company added that its performance was driven by revenue increase from its nationwide retail outlets, especially its newly commissioned mega stations.
This was also augmented by additional income streams from its world-class quality lubricant products.
Conoil said it stepped up engine oil export to West African markets as well as entered into joint venture partnerships with leading car manufacturing companies.
It added that its income was also bolstered by ancillary services including marketing of Low Pour Fuel Oil (LPFO).  It would be recalled that the front line oil products marketer had shown signs of a sound financial year after posting 341 percent increase in profit before tax while its profit after tax went up by 329 percent in the third quarter of 2013.
In his comments on the results, Chairman, Conoil Plc, Dr. Mike Adenuga Jnr, said the company had consolidated its competitiveness in the different segments of the business. “We also pursued and sustained strategic expansion of our retail network across the length and breadth of the country with a view to ensuring that a lot more people, especially in the remotest parts of the country, have access to our superior products and services.”
While assuring the shareholders that Conoil is equipped with all the essential materials, intellectual and human resources, to surmount the challenges ahead in the downstream petroleum sector, Adenuga stated that the company has been positioned to take full advantage of opportunities that could arise from the Federal government’s economic reforms, by leveraging on the solid base built over the years.
“Greater attention will be devoted to cutting operational costs in the different segments of the business, while still maintaining and improving on the quality of our products and services.With renewed commitment, we will explore developing and emerging markets, even as we continue to build on our strengths in areas where we perform well, with good growth and profitability,” Adenuga added.
Conoil’s Competitive Edge
At the beginning of 2013, the frontline petroleum products marketer, launched the second phase of its comprehensive four-year expansion plan started three years ago, with the commissioning of new ultra-modern retail outlets spread across the country.
Conoil had earmarked about N4.8 billion for the project which is targeted to grow the company’s sales and revenue by over 65 per cent.
The company embarked on the plan to adequately prepare for industry-specific challenges, ensure impressive growth in its performance indicators and consolidate its leadership position in the downstream petroleum business.
The company had commenced the ambitious plan with the upgrade of its storage tanks at the company’s depots nationwide to accommodate bulk product imports.
In pursuant of this, the company increased the storage tanks for white products – Premium Motor Spirit (PMS), diesel and kerosene – to 80,000 metric tonne, to double the capacity of its storage facilities at its Apapa installation. 
The statement from the company said another major plank of the expansion programme was the construction of the company’s multi-billion naira Port Harcourt depot which has the capacity to hold 70,000 metric tonne of various petroleum products with the propensity to dispense 5.5 million litres per day. The Port Harcourt depot complements the company’s flagship installation in Apapa, Lagos, providing easy access to fuel imports and easing the pressure on available jetties and other port infrastructures in Lagos.
“Conoil, which controls about 30 per cent of the nation’s lubricant market, has also committed substantial investments to upgrade and expand its lubricant blending plants at its depots at Apapa, Lagos, Port Harcourt and Kano with a view to meeting and surpassing customers’ ever increasing demand for its quality engine oil.
“The company’s lubricant business received a major boost during the financial year under review, when it was admitted into the ECOWAS Trade Liberalisation Scheme (ETLS), which afforded the company the opportunity to export its high grade, proudly made in Nigeria motor engine oils to established markets in the sub-region duty free.
“The ETLS was adopted by ECOWAS member-states to eliminate trade barriers and facilitate trade integration, improve the foreign exchange earnings of companies of member states and create more jobs in their respective countries.
“Also, the company, through innovation in the production and distribution of Liquefied Petroleum Gas (LPG) from the state-of-the-art LPG bottling plant located in Ikeja, Lagos, launched itself as a leader in the provision of services that are of world-class standards to consumers,” the statement said.



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