By Michael Eboh
JAPAUL Oil and Maritime Services Plc has assured its shareholders of improved returns on their investment in its 2010 financial year.
The company also announced the acquisition of two new vessels, worth about N3.56 billion ($24 million), to boost its activities and ensure a significant improvement in its bottom lines in the year ahead.
Speaking in Lagos, the Managing Director of the company, Mr. Paul Jegede, stated that with the acquisition and deployment of the vessels and also with the recent peace in the Niger-Delta region, the company will be in a better position to reward its shareholders with improved earnings and high return on investment.
He further stated that, till date, the company has acquired about 10 vessels, running into, well over N12 billion, and which when fully deployed, will ensure that it earns about N14.85 million ($100,000) per day.
He said, â€œWe have invested our funds, just in line with what we passed across to investors during our public offer. We have not deviated from what our promises were on what we will do with the funds.
â€œWe have acquired, till date, about 10 vessels, which runs into several billions â€” about N12 billion put together. These funds were invested in all kind of vessels, excluding dredgers, and when some of these vessels are deployed, we will be expecting, on an average, nothing less than $100,000 per day on the income that the vessels will bring in.â€
â€œRecently,â€ he continued further, â€œwe just acquired two new vessels which cost us about $24 million. They came in last week, and then, they have brought us a contract with the Nigerian Liquified Natural Gas (NLNG) for three years, and wit these years, the vessels will be there and there is likelihood that the contract will be extended.
â€œThe dredging division of the company is still handling contracts for Shell, worth over N6.68 billion ($45 million). We still have contracts with various other multinational companies, which are bringing us revenues on a continuous basis.â€
He blamed the businessâ€™ performance in its 2009 financial year on the insecurity in the Niger-Delta region, which adversely affected its contracts as majority of the oil majors were afraid to do business in the region.
Jegede reiterated its resolve to boost the value of its assets, and gave hints of plans to raise additional funds from the capital market in the near future.
He said, â€œOur expectation in Japaul is to build up the asset of the company.â€The money we raised in the past is not enough for the kind of business we do. However, we believe that people must get sufficient return on their investment before we say let us move forward again.
â€œThe whole money we raised, if we want to apply it properly, can hardly buy three meaningful vessels. It is a highly capital intensive industry, that is why you do not find too many people in it. That is why you also find too many Nigerians buying old vessels, which they can afford. Each of these vessels cost as much as $30 million and some as high as $100 million per vessel.
â€œGoing by the capital base of banks in Nigeria, I do not think there is any of them that can finance such kind of business. So we intend to move up and there is no way, if we have to really have the full gain of the market, there is no way that we will still not come back to the market to raise more funds.
This is because the fact still remains that the industry is still a lucrative industry for those that have the capital to take the gains.â€