Caverton Offshore Support Group Plc, major provider of marine, aviation and logistics services to local and international oil and gas companies in Nigeria, last week declared a loss of N2.422 billion for the half year ended June 30, 2016, compared with a profit of N1.093billion in the corresponding year.
Caverton said the lower earnings were being envisaged largely due to the unavoidable impact of the recent Naira devaluation, which took place within the second quarter of the year.
The company which had sent a profit warning saying it would report lower earnings for the H1 of 2016, said the impact of the recent devaluation of Naira by the Central Bank of Nigeria (CBN) was 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 N9.143billion in 2016, down from N11.908billion in 2015. Gross profit stood at N3.091billion, down from N5.114billion. Indirect operating (administrative) expenses rose to N5.031billion, compared with N 3.233billion 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. Despite the loss, the company assured that it would continue to focus on its diversification programme.
It said: “We continue to focus our efforts on diversifying and increasing our revenue streams and also improving our profitability through expansion into higher margin offshore service offerings. Management is confident that its ongoing initiatives and investment across its value chain will provide improved future performance, positioning it for long term success.”
The company’s fortunes are being affected by the challenges facing its clients in the oil and gas sector due to the decline price of crude oil at the international market. A situation that has made the company embark on diversification of its operations.
