… targets N11.09bn profit after tax in 2016
By Nkiruka Nnorom
Forte Oil Plc said it plans to grow its profit after tax for the financial year ended December 2016 to N11.09 billion. The company also targets profit before tax of N12.84 billion for the same period, while the revenue for the period is expected to settle at N22.30 billion.
Outlining some of the strategies to be deployed by the company to achieve the set target, the Group Managing Director, Mr. Akin Akinfemiwa, who spoke at the Investors’ Conference in Lagos, said the major driver of the expected financial objective would be the company’s involvement in lifting crude oil in the country, a development, he said was not reflected in expected financials of 2016.
Additionally, he said the company would complete major overhaul of Geregu Power Plant, which it owned 51 per cent, to restore the plant to the installed capacity of 414MW and add additional 21MW in order to bring the total capacity to 435mw. The Forte Oil boss explained that going into 2016, the company would pursue organic and inorganic expansion, saying that it hopes to acquire additional 30 strategic retail sites in key business areas, as well as develop five retail centres with convenience stores.
He further stated in pursuing increased profitability, Forte Oil plans to introduce more product offerings (Bitumen, LPFO and LPG), and “will conclude plans with four reputable partners to roll out 70 brand new redesigned lube bays nationwide under our brand name – FO Quick Fix.” Akinfemiwa informed the investors that the company would commence the roll out of the new lube bays in January 2016 as well as launch its e-commerce site – FO Quickbuy – to allow customers make purchases online.
According to him, “Forte Oil will deepen focus on high margin products by increasing lubes and throughput per station. We will also exploit LPG business particularly, LPG retailing and bottle refilling and optimise and expand the Geregu Power Plant assets.”
“We will also diversify into upstream space through profitable acquisition of upstream assets, harness partnerships with convenience stores, financial institutions and telecommunication firms and increase footfall to our station. “We will also make accretive acquisitions by exercising bid/pricing discipline, he said, adding “in the coming year, we are going to pursue aggressive mergers and acquisitions along the energy value chain and achieve market dominance through acquisition of retail infrastructures/assets.”
He noted that the company has positioned itself to take advantage of opportunities that would occur in the industry with divestment of International Oil Companies (IOCs) and proposed sale of marginal oil fields by the federal government. “We have entered into partnership and alliances with technical partners to participate in the proposed federal government of Nigeria sale of marginal oil fields and divestment of international oil companies from local oil blocks,” he said.
On subsidy payment, he said: “At the start of 2015, Forte Oil had N26.5 billion in outstanding subsidy payments. Following payments by the federal government, Forte Oil Plc’s receivables as at 9m 2015 stood at N15.8 billion, reflecting N10.7 billion in payments made to Forte Oil at the said period. Petroleum marketers continue to mount pressure on the federal government to pay marketers.
“In November of 2015, the federal government approved the payment of N413 billion to petroleum marketers, which is expected to be paid before the end of the year.” In his comment, the chairman, Mr. Femi Otedola, said that the company has placed corporate governance in front burner, adding that companies that have outlived their founders took issues of corporate governance very serious. He stressed that the management team have been given freedom to run the company without interference from him.