Conoil Nigeria PLC, a major oil marketer in Nigeria posted a profit of N1.19 billion amid a weaker naira, slump in oil price and the subsidy arrears.
Analysts attribute the impressive results to better execution of its marketing strategies and effective customer management across a broad spectrum.
Industry experts say Conoil’s profit position is coming amid macro and operating conditions crimping the growth potentials of downstream oil companies operating Nigeria.
For instance operators in the downstream incurred high costs due to the devaluation of the naira and high interest rates as they rely mostly on importation of petroleum product to meet local demand as output from local refineries are low.
Conoil and other oil marketers also had top lines damped as delayed subsidy payments by government hindered them from expediting orders for importation of Premium Motor Spirits (PMS), a major revenue earners of these firms.
As a result of the challenging environment, Conoil net income dropped by 16 percent in the period under review. Sales were down by 42 percent to N60.15 billion as against N104.22 billion last year. Gross profit reduced by 17.51 percent to N8.90 billion in September 2015 as against N10.79 billion the previous year. Cost of sales dipped by 41.51 percent to N51.25 billion.
Conoil is intensifying its resources to see that it consolidate its position in the market. It also intends to carry out cost control measures in order to cut costs and boost profits.
The company would consolidate its leadership position in the lubricant market by offering bouquet of quality lubricants to consumers as well as building new production lines to increase capacity, according to the chairman of the company Mike Adenuga, during the Conoil’s 45th annual general meeting held at the weekend in Uyo, Akwa Ibom State.
“Greater attention would be devoted to cutting costs of operations in the different segments of the company’s business, while maintaining and improving on the quality of its products and services,” said Adenuga.
Conoil share price closed at N27.41 on the floor if the exchange while market capitalization was N19.02 billion.
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