FORTE OIL REAPS FROM LIQUIDITY AND WEAK NAIRA

Forte Oil was not one of those companies thar groaned from the weakening of the naira since the reversion to inter bank market in June last year. It gained from it and from more effective working capital and overhead management in year 2016.

According to audited figures for the year to December released recently,  Forte oil reaped N35.6m from foreign exchange within the year compared to loss of N2.3m in 2015.

This brought comprehensive profit for the year to N2926.5m, down 49.4% on 2015's N5784.2m.

Within management control was the lower growth in overheads compared to revenue increase and the juggling in loan portfolio that resulted in more absorbable servicing cost growth.

Within the year, far more costly overdraft was drained by 81.2% to N1928.3m and replaced with 55.5% rise in short term borrowing to N21395.8m. In the end, finance charges grew by only 19.9% to N6169.7m.

But for these, and the relative better overhead control, Forte oil would have ended with higher drop in comprehensive profit for the year.

The stage was set by 15.7% increase in total income to N152875.9m driven by 19.2% growth in core income to N148605.3m but checkmated by higher 20.5% rise in cost of sale to N128021.3m.

It helped greatly when distribution cost rose by only 9.5% to N3015.6m  and as administration cost dropped by 6.17% to N10,293.4m.

If not, 42.1% decrease in other income to N2347.2m and finance income's 45.6% tumble to N1887.8m would have decreed higher profit drop than recorded.

FORTE OIL: Nm Full year.
                         2016.             2015
Total income 152,875.9  132138.2
Core income. 148605.3.  124617.2
Cost of sale.   128021.3.  106255.8
Other income   2347.2.         4051.0
Distribution.      3015.6.        2754.2
Administration 10293.4.   10969.9
Finance income 1887.8.     3470.0
Finance cost       6169.7.     5145.1
Forex gain.             35.6.      (2.30)
Total profit          2926.5.  5784.2
Working cap.     (145.8).  (2572.4)
ST loans.          21395.8.  13757.8
Overdraft            1928.3.   10268.4

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