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Ardova targets sustained profitability on key investments, acquisitions

By Helen Oji
15 July 2022   |   2:06 am
With the key investments it spearheaded in 2021, especially its newly acquired Enyo Retail and Supply Ltd, Ardova Plc, at the weekend assured that the firm is well positioned to sustain its growth...

With the key investments it spearheaded in 2021, especially its newly acquired Enyo Retail and Supply Ltd, Ardova Plc, at the weekend assured that the firm is well positioned to sustain its growth and deliver improved returns to shareholders.

The Nigerian Exchange Limited (NGX) recently suspended trading on the shares of the company over late filing of its 2021 Audited Financial Statements.

The company at the weekend filed both the 2021 audited financial statements and first quarter (Q1) 2022 unaudited financial results on the NGX.

According to a statement by the company, it recorded a profit of N1.54 billion in its 2021 operations while the group’s net loss stood at N3.8 billion.

Ardorva explained that the net loss was due to losses from subsidiaries Axles and Cartage, and newly acquired Enyo Retail and Supply Ltd.

However, the company said the acquisition made in 2021 has impacted positively on the bottomline, translating to a profit-after-tax position of N1.6 billion in its first quarter (Q1) performance, representing a 37 per cent increase when compared to the same period in 2021.

Ardova’s Chief Executive Officer, Olumide Adeosun, said 2021 proved to be an eventful year for the company as it marked the completion of its stabilisation strategy, with the consequent strengthened balance sheet providing the leverage for the inorganic expansion required to evolve Ardova into an integrated energy company.

“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 Limited (ERSL) in a deal that makes our retail network the largest in Nigeria”.

He also noted that the company made further investments in cleaner energy infrastructure, as it commenced onsite work on its 20,000 metric tonne Liquefied Petroleum Gas (LPG) storage facility in Ijora, stressing that Ardova 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.

Also speaking, the Chief Financial Officer, Moshood Olajide said the company’s Q1 performance showed significant improvements as yields from investments made in 2021 contributed to growth in revenue, sales volume, and profits.

According to him, the company has continued to increase its capital expenditure, principally in investments that facilitate its strategic expansion.

“We expect to see returns within a three-year window and “the company continued to deliver on profits, as we ended Q1.”
He pointed out that the Q1 2022 performance showed significant improvements as yields from investments made in 2021 contributed to growth in revenue, sales volume, and profits.

“We were negatively impacted by our subsidiaries, Axles & Cartage Limited, which faced operational environment issues and the newly acquired Enyo, which is presently undergoing a transformation process to drive operational efficiency and profitability. When subsidiaries are taken into consideration the group loss amounts to N3.8 billion.

“But the Q1 2022 results showcased resilience as “We sustained competitive growth by increasing revenue by 21 per cent YoY (Group: 50 per cent YoY), with the resulting profit of N1.6Bn putting us in a 37 per cent growth YoY position.

“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,” he said.