19 October 016, Lagos – A major jump in financing costs led to a decline in the bottom-line of Forte Oil for the nine months ending September 30, 2016, writes Goddy Egene
The earnings season is here again when companies declare their corporate results. This time around quoted companies are turning their nine months performance to September 30, 2016. Given the fact the operating environment has been characterised by high inflation, forex exchange challenges, companies are expected to turn in poor results. However, some of the results that have been announced showed high level of resilience on the part of the companies. Some have recorded improved profitability.
Integrated energy firm, Forte Oil Plc is among the early filers of their nine months corporate performance.
Although the company recorded improvement in its topline, bottom-line was impacted by an unprecedented jump in cost of finance, a development that led to a decline of 34.7 per cent in profit after tax (PAT) in 2016.
Corporate background
Forte Oil Plc was incorporated on December 11, 1964 as British Petroleum Nigeria Limited. After 14 years in operation, the company changed its status from a private limited liability company to a public liability company. In 1977, 40% of the company’s shares were sold to Nigerians in compliance with the provisions of the Nigerian Enterprises Promotion Decree of 1977.
A year later 60 per cent was acquired by the Federal Government of Nigeria in favour of the Nigerian National Petroleum Corporation (NNPC). In November 1979 the name British Petroleum was changed to African Petroleum Plc. NNPC’s stake in AP was reduced by 20 per cent in March 1989 after the Federal Government sold the above percentage to Nigerian Citizens, increasing their stake from 40 per cent to 60 per cent. In the year 2000, the federal government under its privatisation programme divested its remaining 40 per cent to core investors and interested Nigerians.
In May 2007, the shareholding structure took a new shape as Incorporated Trustees of NNPC’s Pension Fund divested its stake to Zenon Petroleum & Gas Limited, making it the majority shareholder in the company. As a result, Zenon Petroleum & Gas Limited and his affiliated entities became the core investor in the company. Under the new management, African Petroleum embarked on a rebranding and restructuring programme which led to a name change to Forte Oil Plc in December, 2010.
Forte Oil Plc markets refined petroleum products for automobiles and machines. It operates various services including retail petroleum product marketing; industrial fuels & lubricants marketing, lubricant production and marketing; vendor managed inventory for industries; value added peddling; marine supplies; production chemicals, lubricants and greases among others.
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