Homegrown energy firm, Forte oil has recorded a plunge in its bottom-line for the nine months ending September 30, 2016, following a surge in financing costs.
Although the firm, which is among the early filers of their nine months corporate performance recorded improvement in its top-line, bottom-line was impacted by an unprecedented jump in cost of finance, a development that led to a decline of 34.7 per cent in profit after tax (PAT) in 2016.
Forte Oil had raised investors’ hope of an improved full year performance when it recorded a growth of 31 per cent in profit before tax (PBT) for the half year ended June 30, 2016.
It had reported a revenue of N84.475 billion for the half year ended June 30, 2016, showing an increase of 38 per cent, from N61.168 billion in the corresponding period of 2015. Profit before tax (PBT) rose by 31 per cent from N3.255 billion to N4.250 billion in 2016.
The Group Chief Executive Officer of Forte Oil Plc, Mr. Akin Akinfemiwa, had attributed the impressive half-year performance of the company to aggressive sale drive, strategic retail acquisition, and prudent approach to cost containment.
According to him, revenue grew as a result of ongoing strategic retail acquisitions across the country, increase in pump price of premium motor spirit and increased commercial customer base for both fuels and lubricants.
While investors had expected that Forte Oil would maintain a steady growth for the nine months, considering its H1 results, the company last week recorded a decline of 34.7 per cent in PAT.
Although the company’s top lines showed growth, higher cost of finance and tax expenses compressed the bottom-line. Forte Oil Plc recorded a gross revenue of N121.1 billion in 2016, showing an increase of 32.2 per cent from N91.6 billion in 2015.
An analysis of the revenue showed that fuels accounted for N103 billion,, up from N76.2 billion in 2015. Lubricants and greases recorded N8.188 billion, compared with N5.161 billion in 2015, while power accounted for N7.931 billion as against N7.02 billion in 2015.
Cost of sale rose by 34.3 per cent from N78.6 billion to N105 billion, while profit before tax (PBT) stood at N15.5 billion, showing an increase of 19.4 per cent.
