Conoil Plc, operator in the downstream sector on Tuesday released its first quarter result for 2018; a day after it shares was suspended for trading at the Nigerian’s Stock Exchange (NSE). The result however shows a 21.8 percent increase in its earnings as for the first quarter 2018 as against Q1 2017. Analysis reveals that the company’s earnings were boosted by a surge in its operating income by 212 percent from N30.9 million in Q1 2017 to N96.4 million.
Critical look into the company’s book shows operating income was beefed up by service income and interest from bank deposit received the Conoil plc. Service income and interest from bank deposit amounted to N55.04 million and N10.5 million respectively.
Service income represents commissions received from dealers for the use of the Company’s properties at service stations. The dealers use the properties for the sale of Conoil’s products.
Profit after tax (PAT) of the company increased from N173.5 million as recorded in Q1 2017 to N211.3 million in Q1 2018.
The company’s cost of sales increased by 33 percent from N21.16 billion in Q1 2017 to N28.3 billion in Q1 2018. This drove down its gross profits despite higher revenue of N31.3 billion in Q1 2018 against N24.5 billion recorded in 2017. Gross profit depreciated by 8 percent from N3.3 billion in Q1 2017 to N3.1 in Q1 2018 billion due to high cost of sales.
Conoil plc incurred higher cost of sales in the sale of White products which amounted to N27.3 billion of total cost of sales. Sales of lubricants attracted a cost of N953.3 million during the same period.
The White products segment is involved in the sale of Premium Motor Spirit (PMS), Aviation Turbine Kerosene (ATK), Dual Purpose Kerosene (DPK), Low-pour Fuel Oil (LPFO) and Automotive Gasoline/grease Oil (AGO).
Lubricant products included Lubricants transport, Lubricants industrial, Greases, Process Oil and Bitumen.
Conoil plc earlier today released its Q1 result after delaying for so long which led to the suspension of trading its shares on the Nigeria Stock Exchange Market (NSE). However, a report about lifting its suspension has not been released by the NSE after prompt action by Conoil plc.
According to the memo passed by the NSE, the suspension of Conoil Plc will only be lifted upon the submission of the relevant accounts and upon satisfaction of the exchange in the compliance of accounts in line with all applicable rules.
According to Paul Uzum, a Lagos based stock broker at the NSE, explains to BusinessDay, “The NSE should probably lift the suspension this week following the prompt action by Conoil. However, he doesn’t see the market reacting to Conoil’s suspension as some investors naturally skeptical about Conoil due to their delay in releasing their financials”.
YTD analysis reveals that Conoil’s share price reached its climax of N41.38 as at the 22nd of January, however, dropped to N23.00 as at the last trading day before its suspension. This represents a 44 percent drop in its share price and an 11 percent YTD decline from N28 during opening trading day in 2018.
David Ibidapo
