Caverton posts 19% drop in revenue
Caverton Offshore Support Group PLC (COSG) has posted revenue of N14.45billion for the third quarter (Q3) of 2016. This represents a 19 per cent slump compared to earnings of the same period last year.
The leading provider of marine, aviation and logistics services to oil and gas companies, in its unaudited Q3 2016 results, blamed the revenue drop on slower business activities in the industry.
However, continued efforts to cut costs and increase efficiency across the group resulted in a 15 per cent reduction in operating expenses.
Similarly, administrative expenses also declined by 23 per cent, which highlights its continued effort at streamlining operations.
The Chief Executive Officer (CEO) of COSG, Bode Makanjuola said, in the light of challenges faced with economy, Caverton’s primary focus has been to reduce and manage operating expenses and exposure to the volatility of the forex market, while not compromising safety standards.
Makanjuola said: “We recently received our best Shell Audit Report since 2010, the contracted started, which is an indication of the company’s commitment to maintain safety standards despite the economic challenges.
“As we enter the last quarter of 2016 and move into 2017, our focus will be on revenue generation and diversification of revenue streams, while still pushing further on cost reduction.
“As part of the diversification process, there are opportunities finally opening up for our marine business in the non-oil sector and the Maintenance, Repair and Overhaul (MRO) facility. When completed, it will mean that the aircraft maintenance activities currently being done outside the country will be carried out in Nigeria, and this will bring about reduction in capital flight and training costs for Engineers and Pilots, amongst other benefits.
“The operational results show that we are in a good position going into the last quarter of the year, but for the huge foreign exchange loss recorded that muted the effect of our overall efficient performance,” he said.
Financial highlights made available to The Guardian, shows revenue of N14.45billion down by 19 per cent compared to N17.82billion recorded as at September 2015. Operating Expenses of N8.47billion reduced by 15 per cent in the period, compared to N9.96billion in September 2015.
Administrative expenses of N3.2billion also reduced by 23 per cent, compared to N4.1billion in September 2015. Total Operating Costs of N16.7billion (made up of Operating Expenses, Admin Expenses, Finance Cost and Foreign Exchange Translation Costs, respectively), increased by 1.98 per cent, compared to N16.3billion in September 2015, mainly due to the huge Foreign Exchange Translation Cost of N3.8b in the period, compared to N930million in September 2015.
Operating Profit Before Tax of –N956million down by 142 per cent, being N2.25billion in September 2015.
“The implementation of our strategy to increase service offerings is ongoing as the construction of the Maintenance, Repair and Overhaul (MRO) facility in Ikeja Lagos, is in top gear. We will also continue to explore other innovative solutions in support of deep and shallow water operations in both marine and aviation business.