Forte Oil Plc has unfolded plans to increase market share in the industry through the acquisition of strategic partnership and joint ventures for local refining of petroleum products. The firm is also seeking mergers and acquisition opportunities in energy value chain.
The Managing Director and Chief Executive Officer, Forte Oil, Akin Akinfemiwa, said the company would harness partnerships with convenience stores, financial institutions and telecommunications firms to increase footfall for retail outlets and improve asset utilisation.
Akinfemiwa while addressing stockbrokers and investors at the “Facts Behind the Figures,” on the Nigerian Stock Exchange (NSE), in Lagos at the weekend, said: “We are aggressively pursuing mergers and acquisition (M&A) opportunities along the energy value chain.”
According to him, the company will improve its operating margins by growing the downstream business, deepening focus on high margin products like lubricants, fully exploiting the LPG business, optimising operation of Geregu power plant asset, and achieving optimal structures for debts.
Furthermore, he said Forte Oil with interests in fuel distribution and operator of the Geregu Power plant, plans to diversify into the upstream sector through profitable acquisition of upstream assets, as well as introducing new product offerings like solar energy and other alternative energy solutions.
“With the Federal Government seeking to refurbish its decrepit refineries, as the country is still mainly dependent on exporting crude oil for imports of refined products, the firm is also seeking new investments to reduce reliance on imported oil products that consume a large portion of Nigeria’s scarce foreign currency reserves, especially with oil prices low.”
Speaking on Forte Oil’s financial performance in the first half of 2017, the CEO said revenue dipped by 22 per cent from N84.4 billion in H1 2016 to N65.6 billion as a result of markets inability to import petroleum products due to paucity of forex, and unfavourable landing price of PMS as stipulated in the PPPRA template.
“EBIT increased by 11 per cent to N7.6 billion in H1, 2017 largely due to dividend received from FUS, APDL and freight income; and also increased capacity utilisation and energy sent to national grid from the Geregu Plants and 56 per cent energy tariffs by NERC.
“Profit after tax increased by 84 per cent to N4.1 billion as a result of increase in finance and tax expenses,” he said.
The Chief Executive Officer, NSE, Oscar Onyema, said Forte Oil remains a dominant player in the downstream oil and gas sector of the economy.
Onyema commended the company for ensuring year to year improvement in its financial performance, its consistency in early filing standards at the NSE, and for its resilience in maintaining full operation despite the poor state of the power business currently.