Citing the Nigerian National Petroleum Corporation (NNPC’s) interference in the downstream sector as propelling unfavourable competition with other players, thus leading to the unpredictability in the market, Eterna Plc has urged the Federal Government to deregulate the sector, even as it unveiled plans to expand its operations.
The firm also stated that despite the harsh operating environment for its business in the country, turnover grew by 45.57 per cent in 2018.
The Chairman, Eterna Plc, Lamia Shehu Dikko, at its yearly general meeting in Lagos, said the company achieved consolidated operating environment revenue of N251.8 billion in 2018 in comparison with N173 billion in 2017 representing an increase of 45.57 per cent.
“Although, our gross profit, however, decreased by 27 per cent. This was primarily due to the high cost of doing business in the country, unprecedented high cost of landing petroleum products and thinning margins on our product lines,” he added.
He said profit before tax declined by 29 per cent reflective of the reduced margins and increased cost of operations.
He said in view of the company’s performance, the Board is pleased to recommend a dividend of 25 kobo per ordinary share, subject to approval.
He pointed out that the company is on course with its 5-year strategic plan designed to take it to higher levels of success, stressing that as part of executing the plan, it acquired 14 additional retail outlets in 2018.
“We are consistently measuring our performance against set targets and the Board is providing the oversight to ensure that management delivers on the plans,” he added.
He stated that going forward, the company would continue to pursue the promising opportunities and position itself for growth with the support of the shareholders.
He said the Petroleum Industry Governance Bill (PIGB) which was passed by both Houses of the National Assembly is yet to receive Presidential assent, adding that for the most of 2018, the petroleum industry’s primary actor continued to interfere in determining market prices for regulated and unregulated petroleum products.
According to him, the interference with the attendant advantage that the prime actor has over other market players led to the unpredictability in the market and stifling of entrepreneurship in the downstream sector of the oil and gas industry.
Also speaking at the event, the Managing Director and Chief Executive Officer, Eterna Plc, Mahmud Tukur, said the company remains resolute and not guilty of the contraction it was accused of, adding that 2018 was a difficult year even with 2019 still looking bleak for the oil and gas industry.
He said plans are ongoing to expand its operation downstream, predicting that there would be mergers and acquisitions in the industry.
“We are expanding our retail outlets so that when the market dynamics change, we would be ready for the game changer. We are forward-looking by not looking at short term goals, but focused on long term achievements, “he said.
The National Coordinator, Progressive Shareholders Association of Nigeria, Boniface Okezie, expressed concerns about NNPC ignoring its role as a regulator only to become a competitor in the oil and gas industry.
He, however, commended Eterna Plc for declaring a 25 kobo dividend despite the high cost of doing business in the country and expressed optimism that the company would overtake its major competitors in the next five years.