By PETER EGWUATU
The Group Managing Director, Geo Fluids Plc, Mr. Ala Ibanibo, in an interview with Vanguard spoke on the importance of PIB to local industry in the country. He said that when the PIB is passed into law, it will create a robust revenue base for the industry and enhance capacity building amongst others.
He further assured shareholders and other stakeholders of the company of continuously adding value to them as the entity joins the league of quoted companies on the Exchange. He disclosed that the company will strive to eliminate insider dealings and also adhere to post listing requirements of the NSE.
As you await the passage of PIB bill, how do you think your organisation can benefit from the provisions of the law? Does it portend any good for the sector?
The PIB when enacted to law will result to huge capacity building in technical, economic and management terms with robust revenue base for local service industry as well as giving birth to poly-focal skills development, as well as enhance local content.
When is the company going to transit to the IFRS reporting procedure?
The Law requires companies rendering returns to statutory bodies other than IFRS and CAC to convert by 2013 -2014 and for listed companies to convert by 2012. Geo-Fluids has trained her staff on IFRS and is already transiting. Hence, the year end 2012 financial statement will be fully IFRS compliant.
Why has it taken the company long time to come for listing at the stock exchange after its private placement exercise?
The delay in the listing of the company’s shares on the Nigerian Stock Exchange is as a result of some factors which are beyond our control. They are external factors such as the global economic meltdown and the escalation of violence in Niger Delta. These elements have affected exploration development activities of the oil companies.
At that time we wanted to list after the private placement, but these factors came up and were basically un- anticipated. Also, when we put all of these together, we find out that the capital market also collapsed worldwide in late 2008 up to this point, so there was need for us to be a little bit conscious in order to preserve the investors’ value.
That is, the money they put into the company, because there was no point going to the market when you know that immediately, you are going to lose value. So, the strategy basically is to preserve values for the shareholders and the company in general.
What measure have you put in place this time to ensure that the value of your share is not eroded?
We believe that with the trend of the market today and the level of enlightenment of the investors today, insider dealings is going to be very minimal because no matter how much you try to influence the number and value of your share, the market will react because of the transparency in the market.
We believe that our shareholders will hold on to their shares because of the value attached to it. So that is going to make us the biggest company in our sector with the strongest fundamentals. It is our belief that insider dealings at this moment in the market will be very minimal.
We are also working very comfortably with the stakeholders to ensure that we minimize this physical elements and especially as a young company just coming up into the market, we want to ensure that people enjoy the actual value and not the interest value which has been the bases of all these manipulations in the market. We are going to do every thing possible to fight against that.
How much are you looking at in your listing?
We are having four billion units of our shares but the total unit of shares we will make available for trading starting from the first day of listing is 100 million units. It is going to be just about a hundred million and we are going to sell at N5 which is what the regulator approved for us and we think that this company’s share is far more than that, but that is the very realistic value at this time.
How prepared are you to open your books to every investor now as you get listed on the Nigerian Stock Exchange. Once you get listed, you are no longer accountable to just the board and limited number of shareholders. You would be experiencing a surge in your shareholders’ value and base. What efforts are you making to ensure that the company provides adequate return on investment to shareholders at the end of the 2012 financial year?
We are open and transparent for examination by not only shareholders, but also regulators and indeed all stakeholders at all times. We are going to pay dividend in this financial year. I see the final result very good and positive.
What moves are you making to ensure that your shares are not subjected to insider-dealings on the NSE?
It is my personal belief that given our experiences of the past three years, as far as insider-dealing is concerned, shares laundering, manipulations, etc will have little effect, if any at all, in determining the value delivery based upon the fact that investors are more discerning as well as cautious in taking investment decisions today even in companies with the strongest fundamentals.
How prepared is your company in terms of meeting the post listing requirement of the NSE
We have the human resources to handle the post listing requirements and to provide solution to those challenges as they arise. We are ready to meet the post listing requirements. Very soon, our third quarter result will be made public and it is quite good. We will be making full disclosure of our activities because we are very transparent in the business we do.
Give us a brief performance of your company for the past three years.
We have clearly articulated the challenges that we had in the company in the last three years and so, the company has been making very good profits in the past years, from 2001 to 2007 and of course, before the challenges of the global meltdown in 2008.
This year, we are doing well, we believe that baring every other unforeseen external factors coming globally or nationally and with this kind of atmosphere today -very friendly and peaceful – we will continue to move forward because the first three months, the result havs been good and we are going to publish those account of ours in the next few days and also the result will speak for itself. We think it is also relatively encouraging compared to the last few years’ trading.
What advice do you have for your shareholders as you list on the NSE
We want to encourage Nigerian shareholders to have confidence in this company, to patronise us and to buy and keep our shares because they have hidden value. Also going forward, we believe we are going to maintain the atmosphere as it is now. With this kind of political environment in the next couple of years, Nigerians are going to get a very huge profit from their investment in the company and of course part of the high selling point of our company is that this is not a company that emerged as a result of any merger, it is a company that was built from the cradle and with nothing.
Over the 12 years, with a very little capital of less than N1 million, we have grown now and diversified into this huge portfolio of assets with so much billion in balance sheet size . We think such is a company that needs to be respected, it needs to be appreciated and we want to emphasise this point – we are not like some other companies which are products of merger, we started as a Nigerian company from the cradle up to this day.
Consequently, we believe that if we keep doing those things that have delivered these values to us in the last 12 years, in the next 5 years, we should be able to deliver more values.
We want to let our shareholders know that buying our shares, they have made no mistake.
The advantage that anybody buying our share has is that we have a diversified revenue base, we are not a mono product company; that is the huge advantage that we have and over the last couple of years, we have restructured the company and diversified our revenue base into marine asset which is basically what we do.
We have gone beyond marine services. We also provide logistic service, we are doing specialised products. Our logistic, though just starting, is doing very well. So, we believe that by the time we aggregate the revenue of all of these companies in the next five years, it is going to be very robust. So, you cannot compare the share of our company to that of any other company in our category.
What is the prospect of this company?
All I have said is that the prospect is great. The future is bright for us and we will keep rewarding our shareholders once the outfit is doing well barring unfavourable policy from the government.
The future is great and very promising and I encourage our shareholders to hold on just a little longer and they will reap huge returns from their investments, bearing in mind that we have considerably re-structured our business into several value added and income generating units, as well as considerable expansion of our Liquid Mud Plant at Onne from 24,000 barrels to 50,000 mud processing and storage capacity. The effects of these re-engineering will be felt soon through the bottom line.
Let us know how the company started and how it has grown
The history of Geo-Fluids is replete with tremendous challenges from the inception of the mother company (Geo-Fluids Limited) in October 1994, however like a little mustard seed, it has grown into a “giant oak tree” made up of: Geo-Fluids Ltd: A mud Engineering and Drilling/Completion products Marketing company, Vimatech Ltd: Well-Heads, Xmas Tree, Rock bits and engineering services.
From an annual turnover of less than N3 million and a balance sheet size below N 5 million in 1994, the group today boasts of an annual turnover in excess of N1.5 billion with a balance sheet of over N3.5 billion in 2007. However, in the face of the general challenges of skepticism and acceptability, due to the prejudices of the Nigeria oil industry against locally owned and managed service firms and their ability to deliver, the company commenced effective operations only in December 2000.
The group has however remained focused and determined not only to harness the potentials of a very rich national resource base, but also prove to the world the ingenuity, entrepreneurship, creativity and resilience of which Nigerians are known for.