Industrial and medical gases manufacturer, BOC Gases Nigeria Plc has reported a double digit growth in its profit after tax for the half year period ended 30th June, 2021.
BOC Gases Nigeria Plc, listed on the Nigerian Exchange with ticker name BOCGAS, also reported double digit growth in its revenue both the period in review as well as the second quarter period April-June, 2021.
Analysis of the Statement of Comprehensive Income
BOCGAS earns its revenue from three product sales segments; Gas sales, Engineering services and Sales of gas equipment and delivery charges.
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It recorded growths in revenue from both gas and equipment sales in the period in review, but a decline in revenue booked in Engineering services.
- Gas Sales: Revenue was up from N1.36 billion in H1 2020 to N1.66 billion in H1 2021. On a quarter on quarter basis, it booked N931.55 million revenue in Q2 2021, against N603.31 million in Q2 2020.
- Engineering Services: Revenue was down to N20.51 million from N51.30 million in H1 2020. On a quarter on quarter basis, it booked N18.66 million revenue in Q2 2021, against N22.77 million in Q2 2020.
- Sales of gas equipment and delivery charges: Revenue was up from N58.92 million in H1 2020 to NN84.01 million in H1 2021. On a quarter on quarter basis, it booked N42.39 million revenue in Q2 2021, against N24.33 million in Q2 2020.
Overall, the company’s revenue grew by 19.96%, from N1.47 billion to reported in H1 2020 to N1.77 billion in H1 2021.
The Quarter-on-Quarter performance was even more impressive, as the revenue rose by 52.61% to N992.62 million between April and June 2021.
The cost of sales, selling & distribution expenses and administrative expenses for the period in review was moderate enough to give the company a 25.48% growth in Profit Before Tax.
BOCGAS reported a profit before tax of N244.14 million, about N50 million higher than the N194.57 million reported in H1 2020.
N75.71 million was provisioned for Income tax, and N168.43 million was reported as Net Profit for the 6 months period.
This is a 27.30% increase from the N132.31 million reported at the end of H1 in 2020.
Earnings Per Share at the end of the period was reported to be 40 Kobo.
Analysis of the statement shows that the Net Profit Margin stood at 9.51%.
Analysis of Statement of Financial Position
There was only marginal changes in the companies Assets, with only major changes seen only in the Cash and cash equivalents.
BOCGAS’s cash and cash equivalent increase from N1.64 billion as at 31 December 2020 to N1.79 billion, a 9.26% increase.
The company’s total asset increase by 6.87% between 31 Dec. 2020 and 30 Jun. 2021 to N5.79 billion from N5.41 billion.
The liability on the other hand increased by 11.31% to N2.82 billion, from the N2.53 billion on 31 Dec. 2021.
Shareholders Equity rose by 2.95%, from the N2.87 billion the company had in its books on 31 Dec. 2020 to N2.96 billion.
Analysis of Statement of Cash Flows
A review of the company’s statement of cash flows show that the company recorded a positive cash balance from its activities.
- Net cash from operating activities stood at N303.79 million (Jan-Dec 2020: N283.64 million)
- Net cash from investing activities stood at N1.65 million (Jan-Dec 2020: minus N96.52 million)
- N153.25 million was used in financing activities (N48.04 million was used between Jan – Dec 2020). The increase in the period in review was due to increased dividend payment to Shareholders.
The cash and cash equivalent at 30 June stood at N1.79 billion.
About the company
BOC Gases Nigeria Plc, a public company quoted on the Nigerian Stock Exchange in 1979, was incorporated as a public limited liability company on 12 November 1959 under the name Industrial Gases (Nigeria) Limited.
The name was changed on 10 July 1961 to Industrial Gases Limited and thereafter to BOC Gases Nigeria Plc on 17 March 1997.
The company is a subsidiary of BOC Holdings Limited U.K, which holds 60%interest in the equity of BOC Gases Nigeria Plc. BOC Holdings Limited U.K is a subsidiary of Linde Plc United Kingdom, the ultimate holding company.
BOCGAS has been informed by BOC UK, that it has entered into a binding share purchase agreement dated 16 November 2020 with TY Holdings Limited for the purchase by TY Holdings Limited of;
- The entire shareholding BOC UK holds in BOC Nigeria and
- Certain claims owing by BOC Nigeria to BOC UK and certain other members of the Linde plc group.
The company has 416.244 million outstanding shares and a market capitalization of N3.205 billion.
We have no rating on this company’s shares, our analysis put its fair price between N2.89 and N3.53.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur