Friday, 29th March 2024
To guardian.ng
Search

Eterna canvasses downstream market deregulation

By Helen Oji and Tayo Oredola
13 February 2019   |   3:57 am
Eterna Plc has appealed to whoever emerges winner of the Presidential election to deregulate the downstream oil sector come May 29, when they are inaugurated. Speaking at a news conference to mark its 30th anniversary, the Chief Executive Officer, Eterna, Mahmud Tukur, said downstream deregulation is long overdue, and although a very political and sensitive…

[FILES] Managing director /Chief Executive Officer, Eterna Plc,  Mr. Mahmud Tukur (left); Chairman, Mr. Lamis Shehu Dikko and Company Secretary/Legal adviser, Bunmi Agagu, during the  25th Annual general meeting of Eterna Plc held in Lagos

Eterna Plc has appealed to whoever emerges winner of the Presidential election to deregulate the downstream oil sector come May 29, when they are inaugurated.

Speaking at a news conference to mark its 30th anniversary, the Chief Executive Officer, Eterna, Mahmud Tukur, said downstream deregulation is long overdue, and although a very political and sensitive issue, it has rather become imperative for industry growth.

Although commending the Nigerian National Petroleum Corporation (NNPC) for their efforts on availability of products, but he noted that
supply is fraught with challenges and associated cost. “Let’s stop wasting money on subsidies,” he sid.

Speaking further, Tukur said Eterna’s five-year strategic plan focuses on three major areas – oil, lubricants and other new businesses, adding that despite the environment challenges the company is looking forward to acquiring additional 200 filling stations within the plan period.

He said apart from lubricant, which is Eterna’s mainstay, venturing into retail stations is part of the new focus, to be contracted through franchising, leasing, and acquisition, to double available capacity. “We are not just acquiring stations; we are also getting strategic locations, where we can get value for money.”

He however expressed disappointment in supply inequality in the market, and accused NNPC of servicing mainly the majors and big names, which guarantees products availability to consumers.

To sustain expansion in the West African/ECOWAS sub-region, Tukur also unveiled plans to raise additional fund by way of debt or equities.
By offsetting a N14 billion-debt overhang, he said Eterna has cleared its balance sheet, and now well-positioned to review its processes, streamline operations, and pursue new investment opportunities and expansion.

“Eterna has not raised any fresh equity since 2009, and the market has not been fantastic for raising of equity, but between 2009 and 2018, we have been able to pay over N14 billion in debts, and we have grown shareholders fund from N4 billion to N13 billion.

All these have been done from internally-generated working capital.”

On why the share price of the company is undervalued, Tukur said: “The pricing is not there because people do not know what the company is all about, the internal restructuring, the innovations going on, the capacity building, the businesses that we do, the structure of the organisation is not well known out there.

“Our financials reflect a healthy organisation, but out there is not about our organisation, and that is what we are going to change. As the market improves, general sentiments would impact the pricing and everybody that looks into our share price knows that the company is undervalued relative to its performance, but it is a very good share; we have paid dividend in a very challenging environment.”

Dissecting the five-year strategic plan, Head, Corporate Planning and Strategy, Adeoye Sokoya, maintained that the market share would have to be defined as well volume and market targets.

He said the 200 stations be spread across the federation in clusters, but with major focus on Lagos, Abuja, and Port Harcourt and other commercial cities, and would be in grades A, B, and C. “We are looking at about 20 per cent of the 200 for franchise, lease should be about 50 to 60 per cent, and the remaining would be actual acquisition.”

The strategy document he recalled was drafted in 2017 but had to be reviewed last year due to the dynamics of the economy, “by 2022, which is the fifth year, we hope to have achieved exactly what we plan to.”

0 Comments