Caverton Loses N28.8billion as Stock Plunges to 95kobo/Share

Investors in Caverton Offshore Support Group Plc, provider of marine, aviation and logistics services to oil and gas companies in Nigeria have lost 90 per cent of their investment as the firm’s stock plunged from N9.50 to 95 kobo per share 28 months after listing on the Nigerian Stock Exchange, NSE.

The stock, which was listed at N9.50 has seen a steady drop that hit 95 kobo on Monday, September 26. As such, the market capitalisation of Caverton slid from N32 billion to N3.2 billion, meaning that investors in the company have lost N28.8 billion, Thisday reports.

The firm recently reported a loss of N2.422 billion for the half year ended June 30, 2016, compared with a profit of N1.093billion in the corresponding.

Caverton had sent a profit warning saying it would report lower earnings for the H1 of 2016. It had explained that the lower earnings resulted largely due to the unavoidable impact of the recent Naira devaluation which took place within the second quarter of the year.

It said the impact of the recent devaluation by the Central Bank of Nigeria (CBN) is expected to result in unrealised foreign translation loss arising largely from the groups’ dollar denominated borrowing used to finance core assets in both its helicopter and marine businesses.

When the H1 results were reported last week, it showed a revenue of N9.143 billion in 2016, down from N11.908 billion in 2015. Gross profit stood at N3.091 billion, down from N5.114 billion. Indirect operating (administrative) expenses rose to N5.031 billion, compared with N 3.233 billion in 2015. Earnings before interest and tax was negative N1.624 billion, compared with a positive N2.582 billion. Caverton ended the period with loss after tax of N2.432 billion, as against a profit of N1.093 billion.


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