Connect with us

News and Report

Caverton Helicopter’s fortunes continue to decline

Published

1 year ago

on

Caverton Group boasts of being Nigeria’s leading provider of aviation, marine, and logistics services to local and international oil and gas companies in Nigeria. On paper it can be easily assumed that the business is going well when oil and gas firms perform well and poorly when oil and gas firms struggle. However, recent results show that is not the case in reality.

The company recently released its 2021 FY results revealing it recorded a whopping loss after tax of N4.3 billion compared to a profit after tax of N1.1 billion in 2020 which ironically was a Covid-19 year. That year, the result was a 74% drop from the N4.3 billion profit reported in 2019 which was its best year yet. Well, 2021 has now seen things go from bad to worse with its worst result in at least 5 years. So, what happened?

According to the company, the loss was due to the impact of the “Covid-19 pandemic” and other factors which it claims had “negatively impacted business operations in Nigeria and the rest of the world” thus leading to the losses. As they say, the devil is in the details. A cursory review of the company’s financial statement reveals the losses were due to a spike in its cost of sales, the direct cost of doing business.

More specifically, in 2021 consumables gulped N12.2 billion out of the N24 billion incurred in total cost of sales compared to 2020 with N6.4 billion and N18.5 billion, respectively. Consumables the company explains include aircraft spare parts, aviation fuels, freight and courier services protocol and immigrations etc. Another cost component that recorded a rise were foreign exchange losses and higher finance cost adding N8.5 billion to finance cost compared to just N6.3 billion a year earlier

Unfortunately, it could not pass on this cost to its customers most of whom may have locked in price by paying for service upfront. Revenues topped N34 billion just N2.6 billion higher than a year earlier. This was not enough to cushion the spike in expenses. The worst hit was its core business, Helicopter Services where it lost N5.8 billion.

Despite this challenge, Calverton still had a healthy cash pile of about N5.7 billion helped by a net loan increase of about N11 billion. Over 90% of the bank’s N31 billion loans were borrowed in foreign currency further posing a headwind for operational cost. If the exchange rate situation in the country gets worse this year or even remains as is, the company might take N4-5 billion hit on foreign currency losses. It will point to its revenue being charged in dollars but that is not enough. So, what can management do?

The solutions we see here are two-pronged. One is to immediately raise revenues to levels that can accommodate the rising cost of doing business. This will involve raising prices and increasing orders. It will have to hope that oil and gas companies use more of its helicopters at a higher cost than they ordinarily did. It might also need to look at other customers beyond the oil and gas sector. It is the election season and politicians will want to move from one destination to another as campaign picks up. However, the company seems to be looking in another direction. Here is what its CEO Mr, Bode Makaonjuola said:

“To further boost revenues, the Group has been exploring further opportunities within and outside the oil and gas sector. In addition to growing our market share in the oil and gas logistics sector, our primary focus for the year will be on third party training and maintenance. Our Maintenance Repair and Overhaul (MRO) facility and our Caverton Aviation Training Centre (CATC), both in Lagos, officially commenced business operation in the 2nd half of 2021. Prospects for training and maintenance is extremely positive as we are in advanced contract negotiations with a number of government and private institutions across sub–Saharan Africa.”

It will be interesting to see what these business segments add to revenues in the first quarter of this year. The second thing the company must do is raise capital. Currently, total debt of about N31 billion (without adding leases) is almost twice its total equity of N17.3 billion. Its free cash flow of N4.6 billion will not be enough, so sooner rather than later that loan will have to be repaid and it will have to come from fresh equity.

These are not easy actions, but it appears time is running out. If it does not take urgent action, the situation might not stop worsening.

 

Nairametrics

Related Topics:
Continue Reading
Advertisement

News and Report

Ecobank Alerts Customers on Sim Card Fraud

Published

6 hours ago

on

October 3, 2023

By

 

Ecobank has once again, raised alarm on the dangers of SIM swap fraud, stressing that fraudsters could use it to impersonate them.

In a message to customers via email, the bank explained that SIM swap fraud occurs when scammers use your phone number to access your accounts.

According to the bank, “Scammers impersonate you and trick your mobile phone’s carrier into activating a SIM card, which gives them control over your phone number. It means scammers could potentially enter your username and password when logging onto your online banking platform and then receive the SMS verification code to access your account.

“Protect yourself against SIM swaps, don’t share personal information that fraudsters could use to impersonate you (such as your mother’s maiden name or birthplace) on social media. Never reveal your logins and passwords for your mobile phone, online bank, or credit card accounts to anyone. Please always report any suspicious activity”.

Ecobank also reminded the customers that the bank will not ask them to provide their personal or financial information, stressing that when they receive an email that includes a link to a website, they should ensure that the website is legitimate before visiting the site.

Ecobank further, urged customers not to respond to emails, SMS and unsolicited calls from people they don’t know asking for your personal or banking information.

Continue Reading

News and Report

Bribery: UK court restricts Diezani’s movement, EFCC begins extradition

Published

7 hours ago

on

October 3, 2023

By

A former Minister of Petroleum Resources, Diezani Alison-Madueke, on Monday, appeared before the Westminster Magistrates’ Court in the United Kingdom over an alleged £100,000 bribe.

The district judge, Michael Snow, granted Alison-Madueke a £70,000 bail.

Snow further imposed other terms on Alison-Madueke including an 11 pm to 6 am curfew, an electronic tag to be worn by her at all times and a £70,000 surety to be paid before she could leave the court building.

Although she did not formally enter a plea, her attorney, Mark Bowen, informed the court that she would plead not guilty, Reuters reported.

Her next court appearance will be on October 30 at Southwark Crown Court, which deals with serious criminal cases.

In August, the UK’s National Crime Agency said it suspected that Alison-Madueke had accepted bribes in return for awarding multi-million-pound oil and gas contracts.

In a statement published on its website, NCA said the ex-Nigeria minister “is alleged to have benefitted from at least £100,000 in cash, chauffeur-driven cars, flights on private jets, luxury holidays for her family, and the use of multiple London properties.

“Her charges also detail financial rewards, including furniture, renovation work and staff for the properties, payment of private school fees, and gifts from high-end designer shops such as Cartier jewellery and Louis Vuitton goods.”

In March 2023, the NCA also provided evidence to the US Department of Justice that enabled them to recover assets totalling $53.1m linked to Diezan’s alleged corruption.

Head of the NCA’s international corruption unit, Andy Kelly, said the “charges are a milestone in what has been a thorough and complex international investigation. Bribery is a pervasive form of corruption, which enables serious criminality and can have devastating consequences for developing countries. We will continue to work with partners here and overseas to tackle the threat,” Kelly added.

Diezani was the minister of petroleum resources from 2010 to 2015 during the administration of former President Goodluck Jonathan.

Shortly before Jonathan handed over to President Muhammadu Buhari in 2015, she left the country for the UK.

The Economic and Financial Crimes Commission alleged that the former minister stole $2.5bn from the Nigerian government while she was a minister.

Efforts by the EFCC to arraign her have been unsuccessful as she has not returned to Nigeria since 2015. But the anti-graft agency said on Monday that it had commenced an extradition process to bring Diezani back to Nigeria to face trial.

The spokesperson for the EFCC, Dele Oyewale, said, “The EFCC welcomes, with keen interest, the arraignment of former Minister of Petroleum Resources, Diezani Alison-Madueke, at the Westminister’s Court in London, United Kingdom, following alleged bribery allegations.

“Although the charges preferred against her at the London court, are diametrically different from the 13 counts, bordering on money laundering that the EFCC has raised against her, it is instructive to note that criminality is criminality, irrespective of jurisdictional differences. No crime can go unpunished. The money laundering charges for which Madueke is answerable to the EFCC, cover jurisdictions in Dubai, the United Kingdom, the United States of America and Nigeria.

“To bring the former Minister to trial in Nigeria, an arrest warrant has been obtained and extradition proceedings have been initiated. The commission is on course on her trial. She will soon have her day in our courts.”

 

Continue Reading

News and Report

Mike Adenuga-led Conoil rewards shareholders with N1.73 billion dividend

Published

5 days ago

on

September 28, 2023

By

  • Conoil Plc declares a substantial $2.2 million dividend for fiscal year 2022. 
  • Shareholders to receive N2.5 per share in recognition of Conoil’s outstanding financial performance. 
  • Mike Adenuga’s leadership drives Conoil’s profit before tax up by 60% in 2022.

Leading petroleum marketing firm Conoil Plc, headed by the third-richest man in Nigeria and multibillionaire businessman Mike Adenuga, has declared a sizeable dividend distribution to shareholders of N1.73 billion ($2.2 million).

The $2.2-million payment, which is the last dividend for Conoil’s fiscal year 2022, is equivalent to N2.5 ($0.00319) per share for all 693,952,117 of the company’s outstanding common shares.

At Conoil’s 53rd Annual General Meeting, which took place on September 22, 2023, in Uyo, Akwa Ibom State, shareholders accepted this choice.

According to the information reaching us, the final dividend, which recognizes Conoil’s outstanding financial performance in its 2022 fiscal year, will be deposited to shareholders’ accounts on September 29, 2023.

Conoil’s profit before tax increased dramatically under Adenuga’s direction, rising from N3.83 billion ($4.9 million) in 2021 to N6.13 billion ($7.84 million) in 2022 while confronting various obstacles and a challenging working environment. During the same period, earnings after tax rose by an equally astounding 60%, from N3.08 billion ($3.94 million) to N4.96 billion ($6.35 million).

The increasing profitability of the petroleum-marketing subsector boosted Conoil’s profits per share to N7.14 ($0.0091), a stunning 60.8 percent rise over the N4.44 ($0.00568) generated in 2021.

The company’s board of directors decided to approve a final dividend of $2.2 million, or N2.5 ($0.00319) per share, as a result of this exceptional achievement.

Conoil has strengthened its position as a major player in Nigeria’s petroleum marketing sector under the shrewd leadership of Adenuga. The business is well known for its proficiency in the marketing of a variety of lubricants sold under the “Quarto” brand, including diesel, kerosene, gasoline, aviation fuel, and other liquids.

Adenuga, a well-known telecom tycoon and one of Africa’s wealthiest billionaires, continues to have majority ownership in the oil marketing firm of 74.4 percent, or 516,298,603 shares, further solidifying his position as a key player in the continent’s oil sector.

Conoil’s dedication to providing value to its shareholders and its tenacity in overcoming obstacles in the Nigerian market are both shown by this dividend payment.

Continue Reading

Trending