Conoil reports 27% decline in Profit, declares 150 Kobo dividend

Conoil Plc (NSE ticker: CONOIL) has reported a double digit decline in its Profit after tax for the year end 31 December, 2020. This was contained in the its Financial Statements for the year ended 31 December, 2020 released to The Nigerian Exchange and the investing public.

The Directors of the Company has recommended the payment of a dividend of 150 Kobo per share on the results for year 2020. This dividend is a 25% decline on the 200 Kobo dividend the company paid out for year 2019.

In the year dogged by the Coronavirus Pandemic which had affected the whole world, it definitely affected the company’s performance as well. Capturing this impact in the report, the company stated;

The whole world and therefore the company is affected by the COVID-19 pandemic which started to impact on its operations as from middle of March 2020. Following Governmental regulations on COVID-19, a shutdown of business activities had been carried out between March and May 2020.

Conoil booked a revenue of N117.470 billion, a 15.9% decline from the N139.758 billion it reported in the preceding year.

All the revenue was made from sale of petroleum products, and all sales were made within Nigeria.

Conoil revenue comes from 3 segments;

White Products which contributed 93% of all revenues, amounting to N109.560 billion, as against N132.576 billion made from this segment in 2019.
Lubricants contributed 7% of total revenue, amounting to N7.910 billion, as against N71.82 billion booked in 2019.
The LPG segment recorded no revenue, just as it recorded no revenue in 2019. The stock of NN3.836 million of LPG on Conoil’s books as at 1st January 2020 was also there as at 1st January 2021.

With a cost of sales amounting to N107.652 billion, the company’s Gross profit stood at N9.818 billion. This represents a Gross profit margin of 8.35%.

With marginal increases in other operating income segments, the company was able to augment the reduced gross profit. Rental income almost doubled to N20.779 million was N10.995 million, while the Service income increased from N102.558 million to N109.121 million.

With a significant drop in the litigation claims, the company was able to reduce its administrative expenses from N6.603 billion to N5.182 billion.

The Profit before taxation dropped by 24.3% from N2.832 billion recorded in 2019 to N2.145 billion in year 2020.

Amount paid as tax in the financial year also dropped by 18.0%, from N860.147 million to N705.308 million. Of the N705.308 million taxation recorded in the company’s books;

N673.142 million was paid as Income tax (2019: N715.289 million)
N62.077 million was paid as Education tax (2019: N75.999 million)

With a 27% decline in Profit for the year, the company saw its profit slide from N1.972 billion to N1.440 billion. The Earnings per share also declined by 27% to 208 Kobo from N284 Kobo.

With dividend declaration of 150 Kobo, the company will be paying 72.1% of its 2020 earnings as dividend.

The company’s total assets reduced dramatically from N63.584 billion to N48.864 billion, a 23.15% decrease. The reduction in total assets is attributable to drop in Trade and other receivables segment of the Assets column, it dropped from N40.441 billion to N30.570 billion.

The company also saw a significant reduction in its Total liabilities. It went from N44.117 billion to N29.344 billion. In the year in review, Conoil cleared most of it’s borrowing obligations, reducing it from N9.150 billion to N189.730 million.

Its Trade and other payables also saw a significant reduction from N31.578 billion to N25.890 billion.

With a Total equity of N19.520 billion (As at 31 December 2019: N19.467 billion), thus having 39.9% of its total assets being funded by the Shareholders.

An Analysis of the Statement of Cash Flows for the year in review by Investogist showed that the company was able to generate a positive cashflow as at 31 December 2020.

N9.977 billion was generated in operating activities as against the N9.773 billion used for the same activities in 2019. This positive swing is due to the cash released from trade and other receivables.
N110.285 million was used in investing activities, most of which was utilized in the purchase of property, plant and equipment. N382.336 million was used in 2019 for the same activities.
N2.092 billion was used in financial activities, as against the N2.501 billion used in N2.501 billion.
As at 31 December 2020, Conoil held Cash and cash equivalents valued at N5.704 billion (As at 31 December 2019, the company had minus N2.070 billion)

Although the performance and dividend was beyond what is usually obtainable from Conoil, the company remains one of the best companies to invest in, in the Oil & Gas sector.

About the company

Conoil Plc (formerly National Oil and Chemical Marketing Plc) was incorporated in 1960 as a private limited liability company – Shell Nigeria Limited. In April 1975, the Federal Government of Nigeria acquired 60% shares of the Company through the Nigerian National Petroleum Corporation (NNPC) and the Company became known as National Oil and Chemical Marketing Company (NOLCHEM).

The Company was later converted to a public company and in the year 2000, the Federal Government of Nigeria through the Bureau of Public Enterprises (BPE) bought 40% issued ordinary shares of the Company held by Shell Company of Nigeria (UK) Limited.

After the privatization of the Company, Conpetro Limited acquired 60% of the issued shares of the Company. As a result of a rights offering by the Company in 2002, Conpetro Limited now holds 74.4% of the issued capital while members of the Nigerian public hold the remaining 25.6% stake in the Company.

The Company’s name was formally changed from National Oil and Chemical Marketing Plc to Conoil Plc on the 14th day of January, 2003.

Conoil was listed on The Nigerian Exchange on January 1, 1970 and 693,952,117 outstanding shares, and a market capitalization of N12.976 billion.

Shares of Conoil traded at N18.70 at the close of trading on Friday on the floor of the Nigerian Exchange.

YTD, the share price is down by 10.31%, and down by 41.19% over the past 3 years. The stock is down by 18.70% over the past 5 years.

The registered address of the company is 38/39 Marina Lagos, and its registrar is Meristem Registrars Limited.