Japaul Oil & Maritime Services Plc, on Monday, reported an after-tax profit of N40.917bn, for the year ended December 31, 2019.

According to the results presented to the Nigerian Stock Exchange (NSE) at the end of the 60-day extension granted, the profit was despite the 22.51% drop in revenue from N936.282m in the corresponding period of 2019 to N725.471m.

Direct costs for the period dropped slightly to N1.668bn from N1.963bn, resulting in a gross loss of N943.394m, down from N1.028bn in 2018.

The situation was however transformed significantly by the “other income” of N43.816bn, compared to the previous N111.87m, which according to the notes to the account resulted from the N43.017bn profit on disposal of property, plant and equipment.

The amount, the bank explained, “represents the settlement value of the Japaul Building, outstanding debts on Access Bank, outstanding finance lease from Standard Chartered Bank (Continental 1) and Marina Lilac.”

Explaining further, Japaul’s director added that “during the year, land and buildings, marine and survey equipment pledged as collateral securities for various loans obtained by the company from Access Bank have been Forcefully taken over to settle all obligations to the bank based on duly executed terms of settlement before the Federal High Court directive on suit no: FHC/L/CS/1222/2018.

The company further explained that a US$66,478,405.35 facility “was further restructured with the accumulated unpaid interest of US$11,244,554.98 and rolled over at a reviewed rate of 10% per annum. The balance has been collapsed to one account as Access Bank Plc and has been fully liquidated during the year.

“During the year, the marine equipments pledged as collateral securities for various loans obtained by the company from Access Bank have been Forcefully taken over to settled all obligations to the bank based on duly executed terms of settlement before the Federal High Court directive on suit no: FHC/L/CS/1222/2018.”

As part of settlement terms, the company agreed to irrevocably and unconditionally assign all of the interest in the two dredgers (JDXII &JDXIII with registration no SR 2525 & SR 2526 respectively) to the bank for the sum of N5bn.

Both dredgers, according to the agreement, “are to be released back to the company for six years with one year moratorium on rental payment on or before January 31, 2021 to January 30, 2026 with equal annual repayment of N1bn each.”

Access Bank and Japual also agreed to a conceded amount of N30.9bn as the final settlement of all outstanding liabilities. This will be settled with the bank’s takeover of the dredgers for N5bn and the barge (Beau Geste) for N25.9bn.

Meanwhile “Japaul is to give up its Land and building for N1.5bn, which the bank will give as piecemeal working capital to facilitate the maintenance of the dredgers. This was treated as a receivable since Japual is yet to receive the money,” the company explained further.

A breakdown of the revenue for the period showed that the company did not earn anything from vessels’ rental for the second year, while chipping and crushing income rose to N126.68m from N109.24m; while dredging revenue tumbled from N213.708m to N85.853m; just as equipment rental income fell to N512.939m, compared to N613.333m of 2018.

Direct costs was boosted by depreciation expenses which stood at N1.35bn, down from N1.559bn; followed by dredging cost of N140.978m, up from N125.691m; while equipment repairs and maintenance gulped N140.978m, up from N125.691m; among others.

Administrative expenses dropped from N2.497bn to N635.835m; while operating profit stood at N42.236bn, as against the previous N3.412bn loss. There was zero interest expense on bank loans and overdrafts during the period, up from N1.517bn; finance lease interest dropped from N498.621m to N320.883m; while operating lease interest fell from N.154bn to N887.264m, resulting in a net finance cost of N1.208bn, up from N3.17bn in the corresponding period of 2018, arising from the zero finance income for the second successive year.

Profit before tax stood at N41.028bn, as against the N6.583bn loss in 2018; while the tax expense of N111.456m resulted in net profit of N40.917bn, a significant improvement over the N6.593bn loss of the prior year.

This translated to Earnings Per Share of N6.53, compared to the N1.05 loss each recorded in 2018.