In a business environment that is ever changing and in which many chief executive officers pick up their choice books on the much sought after topic, “Managing in a changing world”, Akin Akinfemiwa, the Group Chief Executive Officer of Forte Oil Plc, is a man who knows that he has his work cut out. This is because he finds himself atop a management team of a group that is not waiting for the business environment to change or for it to walk into a world that is experiencing changes; it has, in fact, created the changes as a transformation strategy that is beginning to produce results for which the shareholders are taking notice and getting the feel good factor, in a way that they didn’t do a few years ago.
In 2011, Akinfemiwa led his team to carry out a complete restructuring of the company’s business the aim of which was to transform Forte into a lean, talent- based and technology-driven organisation. He had said then that this was to enable Forte to be more responsive to the needs of its customers. “This has led to improved operational efficiency, across the board improvements in controls; stronger corporate governance and compliance are being ensured at all levels as well as the introduction of the foremost business enterprise solution-SAP,” he further explained.
“The hallmarks of our transformation strategy include: strong corporate governance, business ethics, compliance and controls at all levels, coupled with enhanced safety, health and environment practices across our value-chain,” Akinfemiwa would later say.
He said recently that the strategy script that he is executing is one that would include diversification of the group earnings across the energy value chain, restructuring of Geregu Power Generating Plant, as well as expansion into alternative energy and midstream oil and gas through joint ventures, strategic alliance and acquisitions.
Forte’s recent results are evidence that the transformation is working for the company. You have only to cast your mind back to 2009, 2010 and 2011 to see what this means for the company and its shareholders. In 2009 it recorded losses of N8.9 billion and posted losses of N2.8 billion in 2010. The 2011 loss was huge at N19.95 billion, which many saw at the time as the company’s attempt to clean itself up before setting in motion the transformation agenda for the company
When the company decided to take another look at the business and carry out a complete restructuring it was with an aim to stop the bleeding. This transformational restructuring also has the additional objective of pushing the company to the “number one position as energy solution provider in sub-Saharan Africa in the next two years.” To do this, Akinfemiwa is leading the push into Ghana where APOG, Forte’s fully owned subsidiary is operating. It has also taking positions in Liberia, Togo, Sierra Leone, Chad and Niger Republic.
“Our transformation agenda is built on three pillars. The first is to build a long-term, yet successful company. The second is enhancing shareholders values through robust returns; and the third is boosting investors’ confidence,” Akinfemiwa further explained.
Just a year after Akinfemiwa began implementing the complete restructuring Forte recorded a profit before taxation of N1.15 billion with profit after tax standing at N1.007 billion. We have seen this continue in the first half of the 2014 financial year. For instance, some major highlights of the half year results shows that profit before taxation rose by 152% to N4.19 billion; revenue grew 33% to N79.61 billion. Akinfemiwa has continued to work on expansion such that strategic expansion of its retail outlets in Nigeria and Ghana were carried out in the first half.
There was also an aggressive growth of its industrial/commercial customer base to meet its objective of being the supplier of choice. There was also success from the expansion into electricity generation business as the recently acquisition of the Geregu Power Plant contributed 29% to profit before tax of the group. For shareholders, a share price appreciation of 141.43% year-to-date was recorded as at August 19, 2014.
The Chief Executive Officer has also steered the group in a way that has seen it included in the Morgan Stanley Capital International (MSCI) Frontier Market Index, one of the world’s leading equity index provider; as well as its inclusion into the Nigerian Stock Exchange’s league of ‘Highly Priced Stock.
Akinfemiwa is still bullish in terms of growth and diversification of the company. “Forte Oil also plans to diversify into refining and petrochemicals business, expansion into upstream oil and gas through participating in government bids round and diversification of undeveloped fields from IOCs,” he said. His target in these pursuits is shareholders as he believes that at all these will result in increased dividend year-on-year for the shareholders.
The result already achieved in the first half of this year is one that Akinfemiwa is very proud of. “We are very pleased with our audited half year results for 2014, which exhibits consistent and sustainable growth for both revenue and profits. This performance is an affirmation of the resilience of our businesses and a true test of our business transformation strategy despite the adverse impact of petroleum product scarcity experienced in the first quarter of the year. Superior contributions from our power and upstream services divisions continue to strengthen our market dominance in our quest to be the foremost energy solutions provider. As we enter the final phase of our business transformation, we are confident of building a long term successful company and making Forte Oil PLC the investment of choice through positive actions that boost investor confidence at all times,” he said in expressing a CEO who is surefooted about where he is taking the company.
Akinfemiwa was a former director, Trading and Business Development of Fineshade Energy Limited. He has longstanding experience as an international petroleum products trader with focus on oil and oil products futures, swaps and derivatives trading responsibilities. He was influential in developing strategic trading and supply relationships for Oando in West Africa.
Akinfemiwa also worked in banking as a business process analyst and a sub-team leader on the bank’s business transformation project in 2001 at FSB International Bank PLC. Now, you can see why implementing transformation just comes easy to him. Akinfemiwa studied at the Said Business School, University of Oxford, United Kingdom. His first degree is in mechanical engineering from the University of Ibadan; but he also has Master of Business Administration (information Technology) from the University of Lincolnshire and Humberside, United Kingdom. He has also taken courses and seminars in global institutions, including that of the Wharton Business School, University of Pennsylvania.
Phillip Isakpa
