Ardova Plc (Formerly known as Forte Oil) has joined the list of companies, including those operating in its industry as well as in other industries to fall under the hammer of Covid-19 economic crisis.
According to the unaudited interim financial statements for the period ended 30 June 2020 released to the Nigerian Stock Exchange and the investing public, the company’s; Revenue rose by 5.47% to N87.314 billion from N82.785 billion recorded in H1 2019 while profit after tax slumped by 81.43% to N1.012 billion from N5.451 billion reported in H1 2019. The net profit margin was 1.16% in H1 2020, with EPS settling at N0.78 from N4.18 in H1 2019.
The components of H1 2020 revenue are;
- Fuels – N79.497 billion an increase from N74.308 billion posted in H1 2019.
- Lubricants – N7.805 billion a drop from H1 2019 figure of N8.450 billion
- Solar system – N7.340 billion a decline from N27.245 recorded in NH1 2019
- Liquefied Petroleum Gas (LPG) and Cylinder Sales – N3.457 billion. Ardova did not record any revenue from this category in H1 2019.
A review of the income statement showed that the cost of sales gulped N81.965 billion which represents 93.87% of the revenue while gross profit stood at N5.348, just 0.612% of the revenue.
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Ardova registered other income which amounted to N604.842 million down from N3.488 billion in H1 2019. Similarly the finance income of the company dipped to N150.622 million from N4.452 billion it reported in H1 2019.
Although the company was able to bring down some of its expenses as seen in the expense column with major changes shown below
- Distribution expenses dropped to N1.029 billion down from N1.132 billion in H1 2019
- Administrative expenses declined to N3.401 billion from N4.406 billion in H1 2019
- Finance cost decreased to N502.352 million from N1.659 billion in 2019.
The slump in Ardova’s “other income” and “finance income” resulted in the steep decline in its H1 2020 profit after tax.
In the second of 2020 (April to June), Ardova revenue declined to N35.262 billion from N40.227 billion it reported in the same period in 2019 while profit after tax dipped to N514.923 million from N2.126 billion in 2019.
A review of the balance sheet showed that the total assets declined to N45.341 billion as at 30 June 2020 from N47.019 billion as at 31 December 2019. This is mainly due to decline in “Property, plant and equipment” to N10.014 from N11.117 billion in H1 2019 and a drop in the company inventory to N9.197 billion from N12.834 billion in H1 2019. However, “trade and other receivables” rose to N19.471 billion from N16.678 billion is H1 2019.
Similarly, total liabilities dropped to N28.165 billion within the period in review from N30.856 billion as at 31 December 2019. Major changes in the liability column are;
- Decline in medium term bond to N2.593 billion from N4.199 billion
- Trade and other payable dropped to N19.258 billion from N22.823 billion as at 31 December 2019
- Bank overdraft rose to N2.415 billion from N116.773 million as at 31 December 2019.
- Zero employee benefit was recorded against N262.902 million reported as at 31 December in 2019.
The equity section of the balance sheet showed that total equity rose to N17.176 billion as at 30 June 2020 from N16.163 billion as at N31 December 2019. This is due to increase in the company’s retained earnings to N9.842 from N8.830 billion as at December 2019.
Ardova Plc finances only 37.88% of its assets with equity.
From the statement of cash flow, it was observed that Ardova closed the period in review with a negative cash and cash equivalents of minus N438.087 million despite N1.867 billion cash and cash equivalents as at 1 January 2020.
Negative net cash from operating activities, amounting to minus N930.074 million in H1 2020 against N12.780 billion reported in the same period in 2019.
The investing activities generated a net cash of N254.726 million down from N3.987 billion in the same period in 2019. This is mainly due to Proceeds of N317.418 million from “sale of property, plant and equipment”, regardless of N162.974 million spent on “acquisition of property, plant and equipment” within the first half of the year.
Ardova registered minus N1.629 billion from its financing activities.
Ardova Plc is into the business of petroleum products marketing. The share price has remained unchanged at N13.45 per share since 20 July 2020. The 52 week high and low prices are N20.60 and N9.40 per share respectively.
The five years share price movement is shown below
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