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Conoil promises improved profitability for 2009 financial year

As petroleum products marketing companies battle the tough challenges in the downstream oil sector, there are strong indications that Conoil Plc is set to excite its shareholders with its 2009 financials.

The result, contained in the company’s unaudited report to the Nigerian Stock Exchange, showed appreciable increase over the N3.3 billion recorded in 2008, even as its first quarter result for 2010 suggests much better performance in 2010, judging from the impressive indices recorded.

A top management source said the Board of directors was happy with the 2009 result and is considering proposing a sizeable dividend payout to shareholders.

“It is projected that Conoil shareholders will enjoy jumbo dividend for financial year ended December 2009. And for 2010, it is expected that there would be significant improvement in all performance indices”, the source said.

The performance, it was gathered, had been bolstered by series of strategies put in place by the company’s management. Huge funds were committed in the upgrade and construction of additional facilities at its Apapa, Warri, Onne, Borokiri, Kidney Island, Port Harcourt, Kano and Jos, depots to boost products storage and distribution, while its flagship lubricants enjoyed wider patronage. “The company has stepped up its investment in the importation of petrol, diesel, kerosene and other petroleum products, and are fast regaining large strategic customers in specialised products such as bitumen and base oil, as a result of its competitive selling proposition and product security,” a source said.

Reviewing highlights of the financial reports of companies in the downstream oil sector in 2009, analysts said the marketers performed creditably considering the very challenging operating environment during the year.

A source close to the Stock Exchange pointed out that the results of the major oil marketers compare favourably and reflected the business atmosphere of the time.
“The profit posted by Mobil and Total as well as what Conoil is about to declare are in the same neighbourhood. The case of Oando is different because it always reports a consolidated result of all its subsidiaries and not just the petroleum marketing arm of its business. On the whole, each of the companies is doing very well,” the source explained.

It as gathered that Conoil plans to consolidate on the 2009 performance, as it is set to reap from the huge investment made last year. It will be recalled that it launched some initiatives in the aviation fuel marketing segment which won it major contracts for the supply of Jet A1 to five additional international airlines operating in Nigeria.

Conoil’s plans for offshore investment in West African countries like Ghana and Togo where the downstream petroleum sector is fully deregulated is said to be on course. The company has budgetted about $50 million (about N7.5 billion) for the offshore retail expansion project, whose pilot scheme involves the construction of at least five mega-stations.


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