Japaul Oil suffers 144.60% drop in profit, amidst increasing cost

Crest Star308 November 2013, Lagos – Shareholders of Japaul Oil and Maritime Services Plc may be in for a bad year as the nine months financial results has shown a declining fortune in consolidation of its streak of negative performances.

The unaudited financial statement for the period ended September, 2013, obtained by Vanguard showed that the profit after tax declined significantly by 144.60 percent over the period, even as the cost of sales was on the rise.

This is in spite of the assurances given by the chairman, Major General Joseph Omosebi (rtd), at the last annual general meeting with shareholders of possible return to profitability after a negative outing in 2012.

Specifically, the profit before taxation slumped to N485.500 million from N1.397 billion, while the profit after tax fell to N485.500 million from N1.19 billion in nine of 2012.

Meanwhile, the cost of sales grew to N4.51 billion from N4.400 billion in equivalent period of 2012, showing inefficiency in use of resources.

A further look at the results pointed to a company in financial distress as interest on loans rose to N546.760 million from N220.230 million, indicating an urgent need of fresh capital injection.

However, the turnover for the period grew marginally by 0.70 percent to N9.61 billion from N9.54 billion in 2012. General and administrative cost also improved marginally, rising from N3.544 billion in 2012 to N3.416 billion in the review period.

The recent results could be a pointer to the fact that the company was yet to recover from adjustments made for depreciation and newly-introduced policies for preparations of statutory financial reports as alluded to by the chairman, which he said were responsible for the drastic decline in the profit of the company in 2012.

Explaining the ballooning finance charges, Omosebi had explained that some of the new vessels acquired during the year were financed with loans from the bank, “hence the high amount of interest that we paid during the year.
*Nkiruka Nnorom, Vanguard

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