I I Plc formerly Mobil Nigeria Plc recorded increase in turnover in the first half of 2019 financial year, despite the challenging business climate in the downstream sector.
The company amid higher cost of sales in the first half, its profitability level dipped, declining by 23.40 per cent in profit after tax.
The return on equity fell to 12.86 per cent in half year from 20.86 recorded in the corresponding period of 2018.
Given the mixed current higher input cost on the one hand and its historical good valuation metrics on the other hand, which triggered its BB rating, Assets Cowry management rated II Plc shares a moderate buy.
II Plc’s turnover grew year on year by 8.02 pee cent in half year as sales volume of petroleum products (marketing) increased. The company sacrificed part of its sales margin in order to drive volume by cutting its pump price.
The company result showed that cost of sales rose by 11.37 per cent in first six months of this year, resulting in a gross margin reduction to 8.12 per cent.
The downstream company coupled with decreasing margin in its property’s business printed Earning per share of N11.57 kobo within the period under review compared to N15.11 kobo reported in the preceding year.
Capital market operators said that the company’s re-entry into the sale and marketing of Aviation Turbine Kerosene ATK in the fourth quarter of 2018 would further boost revenue.