The board of Forte Oil Plc, on Monday presented its audited result for the half year ended June 30, 2017, indicating a significant 84% rise in net profit, despite a 22.23% decline in revenue, helped by the N1.4bn reduction in income tax expense from N2.029bn in the corresponding period of 2016, to N628.826m. The directors have however not proposed payment of dividend for the period under review, even as it is not known whether this is in the works.
Revenue for the period dropped by N18.775bn from N84.422bn in the first half of 2016 to N65.647bn, a breakdown of which showed that revenue from fuels retailing remained the honey-pot, pooling N41.297bn, which however represented a huge drop from N73.989bn in the prior half-year. This was followed by the N12.41bn or 283.75% jump in earnings from power generation at N16.789bn, from the preceding half-year’s N4.375bn; ahead of the N6.384bn from lubricants and greases business; and N1.175bn earned from production and sale of chemicals, up from N874.729m.
A further breakdown of the turnover showed that the bulk of the company’s operations (sales and costs) occurred in Nigeria, which accounted for N64.679bn and N52.588bn respectively, while the Ghana subsidiary raked in N979.222m generated at the cost of N887.354m.
Cost of sales dropped to N53.456bn of which N36.079bn resulted from the fuels business, followed also by N11.302bn from power generation; compared to N72.06bn with N65.12bn resulting from fuels retailing and N2.806bn arising from power generation. Gross profit for the period stood at N12.182bn, which was slightly better than the previous N12.362bn.
Other income dropped to N1.008bn, from N1.614bn, helped by the foreign exchange gain of N541.777m, rising from N271.397m; just as distribution expenses reduced by N869.761m or 47.71%; while administrative expense fell to N4.605bn from N5.308bn, leaving operating profit better at N7.632bn, compared to the previous N6.845bn.
Finance income increased from N811.171m to N1.054bn, of which interest income on bank deposits increased to N584.271m from N312.33m, while income from government grant on loan rose to N227.016m from N174.884m. Finance cost was slightly higher at N3.948bn, with interest on medium term bond stood at N835.488m, same as prior half year, just as interest expense on bank loans and overdrafts stood at N3.112bn, down from N3.394bn in the first half of 2016. Net finance cost therefore stood at N2.893bn from N2.583bn.
Profit before tax increased slightly to N4.738bn from N4.262; even as net profit rose by N1.876bn from N2.233bn to N4.109bn, helped by the sharp drop in income tax expense from N2.029bn in the 2016 half year to N628.626m. Total comprehensive income for the period came to N4.105bn, from N2.227bn, translating to earnings per share of 105 kobo, from 188 kobo.