JAPAUL OIL & SERVICES :TASK FOR NEW BROOM

The newly appointed deputy managing director of Japaul Oil & Services may turn out to be the new broom needed to help check the sliding fortune of the company.
By September 2015 the figures did not look good.
Revenue from main line was not only down , this was accompanied with increased cost of sale and less than proportionate decrease in other costs. In the end,loss reported  ballooned to N2353.4m from N490.6m previously.
Japaul's main line revenie had declined by 12.8% to N7227.7m from N8291.8m while cost of sale increased by 15.4% to N5177m from N4487.5m.
Finance cost too rose by 15.8% to N1083.1m from N935.1m although lease interest dropoed by 25.6% to M267.8m from N360m.
Finally administration cost decreased by only 0.56%  to N3151.7m from M3169.3m.
In the end, Japaul settled for N32.2 loss on each N100 income compared to only N5.8 at the same time in 2014.
Eventually, it was nine months of tight liquidity. So tight in fact that Japaul had to increase overdraft to N1553.6m from N337.8m previously. This was as working capital deficit rose to N2511.8m from N1015.7m.
THUS:
* The new broom may have part of its job cut out: cage costs and ensure at least, it goes down as fast as any turnover decrease.
* Also a way must be found for the current over dependence on costly overdraft for working capital needs.

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