Caverton Offshore Support Group Plc (COSG) third quarter sales surged 34 percent on increased demand for helicopters as the company continues to seek expansion through organic growth.
For the first nine months through September 2014, the company’s revenue increased by 34 percent to N18.70 billion from N14 billion the same period of the corresponding year Q3 2013.
The growth at the top line was as a result of increased demand for helicopters charters that complimented its recurring revenue from fixed contracts.
The company was able to translate top line impressive performance to bottom line growth as profit after tax (PAT) rose by 24 percent to N1.87 billion from N1.50 billion the preceding year.
Based on BusinessDay analysis, net margin, a measure of efficiency and profitability increased remained flattish at 10 percent.
The company has a better control of direct costs attributable to projects as gross profit spiked by 59 percent to N9.83 billion as against N5.6 billion the preceding year despite a 17 percent increase in cost of sales.
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Improved margins were further accentuated by favorable pricing policy as gross profit margins jumped to 47.50 percent in the third quarter of the year from 40 percent the preceding year as cost margins reduced to 52.25 percent from 60 percent.
COSG is working assiduously to achieving the National Content Development targets as more indigenous pilots, engineers and seafarers get the required training to enhance their competence.
It also invested more than $1.2 million on training of Nigerians in the various cadres within the company. This is a deliberate effort by the company to assist the federal government realize its intention to increase indigenous participation in the industry through the development of human capacity, as stipulated in the Nigerian Content Development Act of 2010.
Since 2010 when the company put in place a training programme, 146 Nigerians have been trained at a cost of more than $1.2million.
In order to boost performance, the company acquired new asserts as property plant and equipment (PPE) spurted by 114 percent to N19.19 billion from N8.97 billion the preceding year.
Total assets were up by 9 percent to N42.40 billion in Q3 2014 as against N39.03 billon the same period of the corresponding year (Q3) 2013.
Due to COSG borrowings to finance its expansion plan, finance costs were up by 30 percent to N1.22 billion in Q3 2014 from Q3 2013.
Additionally, total interest bearing loans and borrowings were up by 27.01 percent to N19.16 billion from N15.05 billion last year.
Caverton operates the only heliport in Lagos metropolis (Victoria Island); it has 18 aircraft in its fleet, comprising 15 helicopters and three fixed wing planes. It has about 500 staff members, 90 per cent of whom are Nigerians.
The company’s share price closed at N3.85 on the floor of the NSE while market capitalization was N12.89 billion.
BALA AUGIE
