Major downstream player, ARDOVA Plc has released its unaudited financial result for the first half of 2021, posting profit after tax of N1.7 billion.
The amount represents an increase of N7 billion or 70 per cent compared with profit of N1.0 billion recorded the same period of 2020.
The company result also showed that Profit before tax up from N1.1 billion in first half of 2020 to N2.6 billion , representing growth of N1.5 billion or 136 per cent.
The growth recorded by the company according to financial analysts was evident that the rebound in economic activities and improved margin efficiency drove double-digit year on year bottomline growth for the major petroleum product marketer.
The result showed that revenue declined marginally by 0.6 per cent year on year to N86.7 billion in the reviewed period, Cost margin improved to 91.5 per cent in first half of 2021 from 94.9 per cent in reported in the comparative period of 2020, due to increased Lubricants sales and improved economies of scale.
The company’s further improved margin efficiency, boosted gross profit and operating profit by 37.8 per cent and 188.3 per cent y-on- y to print at N7.4 billion and N2.6 billion respectively.
Earnings per share (EPS) increased to N1.36 within the period under review from N0.78 recorded in the corresponding period of last year.
the decline in revenue according to the company result to N86.7 billion was due to supply shortages from Pipelines Product Marketing Company (PPMC) at the start of first half of 2021, as volume sold dropped by 28.0 per cent y -on-y in the period under review.
However, a price hike on PMS, as well as increased market share in its lubricants business cushioned the reduced supply of PMS products.
Across product segments, Fuel revenue fell marginally by 6.0 per cent year on year to N74.7 billion in the first six of operation in 2021.
. In the Lubricants business, sales were up by 43.8 per cent year on year to N11.2 billion as the company’s market share grew, following a 14.0 per cent year on year growth in volumes in the half year result.
ARDOVA’s drive to increase its market share in the lubricant market by signing an agreement with Shell lubricant appears to be yielding support but Profit margin in the PMS segment remained low, as the firm does not hold any wholesale privilege.