The board of energy services provider- Forte Oil Plc, on Friday presented its unaudited result for the nine-month ended September 30, 2017, indicating that net profit increased by 81.41%, despite the 19.98% drop in revenue from the sale of petroleum products and generating electricity. While there was a drop in income from the fuels segment, revenue from the power generation segment (Geregu Power Distribution) increased significantly.
Specifically, revenue for the period dropped by N24.196bn from N121.083bn to N96.887bn; with sale of fuels contributing N60.819bn, which was N42.682bn or 41.23% lower than the 103.501bn reported in the corresponding period of 2016; just as the power arm recorded a N17.524bn or 220.95% jump from N7.931bn to N25.455bn. It was followed by lubricants and greases of N9.085bn from N8.188bn in the first nine months of 2016.
There was a N25.607bn or 24.24% reduction in cost of sales from N105.587bn to N79.98bn, with cost of fuel sales dropping to N56.662bn from N93.195bn. That of power generation soared from N5.414bn to N16.715bn; while lubricants and greases increased to N7.75bn from N5.953bn; and production of chemicals reduced to N851.36m from N1.023bn. This resulted in gross profit of N16.906bn, as against the previous N15.495bn.
Other income dropped to N987.443m, from N2.294bn; the bulk of this was a previously inexistent N398.587m foreign exchange gain from the sale of forex earned from sale of dollar inflows; just as there was no income generated from crude listing contract from which the group earned N768.745m in 2016, being net income from lifting 45,000 barrels per day of crude executed with the Nigerian National Petroleum Corporation (NNPC). Freight income dropped to N178.886 from N587.013m; just as throughput income fell to N133.118m from N402.763m; and provisions no longer required from N312.802m to N51.587m; among others.
Distribution expenses fell from N2.569bn to N1.394bn; administrative expenses fell slightly to N6.793bn from N7.353bn;
Bad and uncollectible debt jumped from N7.197m to N222.848m, representing a significant 215.651m or 2,996.4%; Legal and professional fees fell to N265.866 from N637.984m, representing a drop of about N374.118m or 58.32% for the period. Forex loss reduced significantly also from N198.552m to N20.235m, a difference of N178.287m or 89.8% during the period. These left operating profit at N9.706bn, an improvement over the N7.866bn in the corresponding period of last year.
Finance income at N1.509bn was up from N1.275bn, as interest income on bank deposits rose to N797.142m from N499.661m; other interest income dropped to N372.03m from N420.246m; and other income from government grant on loan fell to N340.515m from N355.832m. This was more than wiped out by the N5.63bn total finance cost, which climbed from N3.509bn, resulting in net finance cost of N4.121bn, from N2.233bn. Interest on medium term bond was N1.255bn; while interest expense on bank loans and overdraft rose to N4.375bn from N3.509bn.
Profit before tax was flat at N5.585bn, as against the N5.633bn, while the fall in income tax expense from N2.836bn to N511.58m translated to a net profit of N5.073bn, as against the previous N2.796bn. Foreign exchange translation loss stood at N4.199m from N5.266m, left total other comprehensive income for the period stood at N5.069bn from N2.791bn.