Directors of Forte Oil Plc, on Thursday, presented its unaudited result for the first quarter ended 2019, the highlight of which included the restatement of previous Q1 financials, as well as the offer of N1.15 special dividend arising from the recent divestment of its upstream business.
The company explained that as at the end of 2019Q1, it disposed of subsidiaries such as Amperion Power Distribution Company Limited, Forte Upstream Services Limited (FUS) and AP Oil and Gas Ghana. The sale of Amperion and FUS, it continued, resulted in N1.55bn gain and N1.23bn respectively, totaling N2.67bn.
FO explained that Amperion was sold for N11.7bn and FUS, N1.242bn; while the total value of the investment in the subsidiaries stood at N10.149bn and N10m.
Also, profit growth for the period struggled to keep pace with percentage growth in revenue for the period, owing to the fast rise in expenses/costs and the drop in finance income.
While sales revenue jumped by N14.189bn or 50.02%, to N42.556bn as against the previous N28.366bn, boosted significantly by the revenue from fuels sale of N38.479bn, up from N25.848bn in 2018; followed by power generation, N12.224bn, compared to N10.071bn; while lubricants and greases contributed N4.183bn, up from N3.453bn. Production chemicals fetched N323.77m, a drop from N387.356m; while solar system contributed just N15.723m, down from N51.257m in 2018. A total of N12.67bn was however reclassified as discontinued operations, compared to N11.445bn.
Cost of sales climbed N13.632bn or 52.72% up to N39.492bn from N25.86bn in the corresponding period of last year. Gross profit, therefore, stood at N3.063bn, rising by 22.24% from N2.506bn.
Other income increased to N348.136m from N257.954m, driven by the N148.568m throughput income earned on storage of products for the Pipeline and Petroleum Marketing Company (PPMC) and other petroleum marketers in Apapa tank farm. This rose from N33.189m; followed by freight income of N104.766m, being revenue from 100 trucks owned by Forte Oil Plc and managed by various logistic companies, a drop from N157.848m in 2018.
Distribution expenses rose marginally from N576.989m to N586.631m; administrative expenses climbed from N1.63bn to N1.719bn; resulting in operating profit of N1.106bn, after rising by 98.64% from N556.92m.
Finance income fell from N231.207m to N198.153m; while finance cost was flat at N849.69m, compared to the N846.624m reported in the prior Q1; following which net finance cost stood at N651.537m, up from N615.417m.
Profit before income tax from continuing operations stood at N454.732m, as against the N58.497m loss in 2018Q1, just as the company reported income tax rebate of N194.821m, as against the expense of N104.675m. Profit after tax, therefore, came to N649.553m, as against the N163.172m loss.
Also, profit after tax from discontinued operations stood at N2.735bn, down from N3.126bn in the corresponding period of last year, while profit for the year amounted to N3.385bn, compared to N2.962bn, representing a rise of N422.189m or 14.25%.