For the financial year ended December 31, 2021, Ardova Plc (AP) has reported a profit of N1.54 billion.
In its audited financial statements and first quarter (Q1) 2022 unaudited financial results which were released on Thursday, Ardova Plc explained that losses from subsidiaries Axles and Cartage and newly acquired Enyo Retail and Supply Ltd created a group net loss position of N3.8 billion
According to the financial statement, Q1 2022 performance showed significant improvements as yields from investments made in 2021 contributed to growth in revenue, sales volume, and profits.
Ardova’s Chief Executive Officer, Mr Olumide Adeosun explained that 2021 proved to be an eventful year for the company.
Adeosun said it marked the completion of Ardova’s stabilisation strategy, with the consequently strengthened balance sheet providing the leverage for the inorganic expansion required to evolve Ardova into an integrated energy company.
He also highlighted parts of the expansion phase that became material in 2021.
“In the course of the year, we concluded a landmark capital raise of N25.3 billion in an oversubscribed bond that was the largest by any downstream company in Nigeria, and an indication of investor confidence in Ardova’s future.
“We also concluded the acquisition of Enyo Retail and Supply Ltd. in a deal that makes our retail network the largest in Nigeria.
“The company also made further investments in cleaner energy infrastructure, as it commenced onsite work on its 20,000 metric tonnes Liquefied Petroleum Gas (LPG) storage facility in Ijora,” he said.
According to him, Ardova also won a license to operate an Oil Marginal Field following a successful bid in the 2020 round, thereby increasing the company’s potential for foreign currency revenue generation.
Adeosun explained that the loss experienced in 2021 was an expected reflection of the strategic inorganic growth programme of the company.
He said it would not affect the viability of the company, especially as some of the immediate benefits of this programme were illustrated by the better year-on-year (YoY) performance recorded in its Q1 2022 results.
Adeosun also stated once fully integrated, the acquisitions alongside the AP renewables subsidiary would provide and safeguard Ardova’s capacity to thrive as global energy consumption tilts to cleaner sources.
In his submission, Mr Moshood Olajide, Ardova’s Chief Financial Officer, noted that the company had continued to deliver on profits.
Olajide said Ardova ended Q1 with a profit-after-tax position of N1.6 billion, which was a growth of 37 per cent compared to same period in 2021.
“We also continued to increase our capital expenditure, principally in investments that facilitate our strategic expansion, and we expect to see returns within a three-year window.
“We sustained competitive growth by increasing revenue by 21 per cent YoY (Group: 50 per cent YoY), with the resulting profit of N1.6 billion putting us in a 37 per cent growth YoY position,” he said.
Olajide said as a group, Ardova was negatively impacted by its subsidiaries, Axles & Cartage Ltd., and recently acquired Enyo.
He said Axles & Cartage faced operational environment issues while Enyo was presently undergoing a transformation process to drive operational efficiency and profitability.
Earnings Highlights Income Statement for the period ended March 31, 2022 include:
• Revenue of N50.57 billion, up 21% y-o-y (Group: 62.93billion) • Gross Profit of N4.82 billion, up 51% y-o-y (Group: N5.42billion) • Net finance cost of N1.03 billion, up 462% (Group: N1.61 billion) • Profit before tax of N1.60 billion up 37% (Group: N0.19 billion) • Earnings per share of N1.23 (Group: N0.15) Statement of Financial Position • Shareholder funds of N21.12 billion, up 8% y-t-d (Group: N17.30 billion) • Total assets of N127.95 billion, up 25% y-t-d (Group: N127.29 billion) Key Ratios • Gross margin: Group 9%, Company 10% (Mar 2021: 8%) • Return on average equity: Group 1.1%; Company 7.9% (Dec 2021: 12.8%) • Operating expenses/Revenue: Group 6%, Company 4% (Mar 2021: 5%) • Interest cover: Group 1.1x; Company 2.5x (Mar 2021: 7.4x) • Gearing ratio: Group 326%; Company 153% (Dec 2021: Group 342%; Company, 160%) • Total Asset/Equity: Group 7.4x; Company 6.1x (Dec 2021: Group 7.4x; Company, 5.2x)
