Caverton links Q2 profit to favourable FX Policy

Marine, Aviation and Logistics Services provider, Caverton Offshore Support Group (COSG) has attributed the growth recorded in its impressive second quarter results on the government’s intervention in stabilising the foreign exchange rate.

According to the company, the intervention was able to help reduce expenses by 61 per cent and deliver better results to shareholders.

The company’s statement signed by Amaka Obiora, the Company Secretary on the Unaudited Financial Results for the period ended June 30, 2017, was released via the Nigerian Stock Exchange on Tuesday.

The statement showed Caverton returned to a profitable position, with a Profit Before Tax of N938m in Q2 2017 from a loss position of N2.4m in Q2 2016, and indicated a revenue of N10.1billion, which grew by 11% over N9.1b same period in 2016.

COSG noted that the increase in revenue during the quarter was due to increase in charter flights and vessel agency operations, which affected operating costs that increased by 9% over last year’s result.

“We have been able to contain the administrative expenses during the period by about 61% arising majorly from the impact of the government intervention in stabilising the foreign exchange rate.” the Company secretary said.

As a result, Caverton says its earnings per share increased to 18 kobo from a negative 73 kobo same period last year.

Reacting to the result, the CEO of COSG PLC, Mr Bode Makanjuola said “COSG’s ability to post this impressive result was a result of the shared will and determination of the company’s management with the support of its board of directors to manage our overall expenses while maximising company revenue potentials.

With the revenue increasing by 11% and the profit before tax by 140% over 2016 half year result, we remain determined to ensure optimal use of the business resources.”

Other highlights from the unaudited report include Profitability Ratios which pegs Gross Margin at 35% against 34% in June 2016, EBITDA Margin is 19% compared to -4% last year June while Net Profit Margin is 9% against -26% June 2016

An analysis of the company’s capital Structure shows the level of debt being serviced by shareholders funds reduced significantly as Net debt/Equity stood at 0.85x compared to 1.21x in June 2016 while Total Debt/Total capitalization is 0.95 against 1.42 in June 2016)

Asset turnover slightly improved to 24% from 23% in June 2016 confirming the firm’s improved utilization of assets to generate revenue for business operations.

On future outlook for the company, COSG says it is undergoing the construction of a Maintenance, Repair and Overhaul facility (MRO) which is at an advanced stage and when completed will enhance the group revenue.

The company noted that a critical review of operations in Marine and Aviation sectors is also under watch as it hopes to be able to tap into the business opportunities available in these sectors.

Caverton is one of Nigeria’s leading oil services companies providing solutions for a range of multinational companies across aviation and marine services. Caverton Marine, one of the fastest growing indigenous shipping companies commenced operations in 1999 while Caverton Helicopters a helicopter charter, sales and Maintenance Company was established in 2002.

Both companies were consolidated to form Caverton Offshore Support Group on 2nd June 2008. The group’s focus and primary business are to provide logistics and environmental support services to oil and gas fields with broader plans to support energy operations along the West African shelf as well as other ancillary services.

Caverton has a young and growing fleet of vessels and aircrafts operating out of nine locations. The company has an impressive oil and gas client base which include Shell, Total, NNPC, Aje- Folawiyo and Chevron, among others.

The company has 3.4bn Shares outstanding and a free float deficiency of 17.40 percent with compliance due date of 31st December 2017 set by the NSE. Its share price was last traded at N1.06.