Caverton Offshore Support Group Plc, provider of marine, aviation and logistics services to local and international oil and gas companies in Nigeria, last week reported a loss of N2.422 billion for the half year ended June 30, 2016, compared with a profit of N1.093billion in the corresponding.
The company had sent a profit warning saying it would report lower earnings for the H1 of 2016.
According to the company, the lower earnings were being envisaged largely due to the unavoidable impact of the recent Naira devaluation, which took place within the second quarter of the year.
It said the impact of the recent devaluation of Naira by the Central Bank of Nigeria (CBN) was expected to result in unrealised foreign translation loss arising largely from the groups’ dollar denominated borrowing used to finance core assets in both its Helicopter and Marine businesses.
When the H1 results were reported last week, it showed a revenue of N9.143billion in 2016, down from N11.908billion in 2015. Gross profit stood at N3.091billion, down from N5.114billion. Indirect operating (administrative) expenses rose to N5.031billion, compared with N 3.233billion in 2015. Earnings before interest and tax was negative N1.624 billion, compared with a positive N2.582 billion.
Caverton ended the period with loss after tax of N2.432 billion, as against a profit of N1.093 billion.
Despite the loss, the company assured that it would continue to focus on its diversification programme.
“We continue to focus our efforts on diversifying and increasing our revenue streams and also improving our profitability through expansion into higher margin offshore service offerings. Management is confident that its ongoing initiatives and investment across its value chain will provide improved future performance, positioning it for long term success,” the company said.
The company’s fortunes are being affected by the challenges facing its clients in the oil and gas sector due to the decline price of crude oil at the international market. A situation that has made the company embark on diversification of its operations.
Speaking on the strategy, Group Chief Executive Officer of Caverton, Mr. Bode Makanjuola had said: “We are working tirelessly to broaden our service offerings through diversification into other sectors, as well as geographically into newer markets in a bid to boost our non-oil and gas revenues.”
He disclosed that in the first quarter, the company successfully signed a new five-year contract in its helicopter operations to manage and operate a fleet of aircraft for the Lagos State Government.
He disclosed that the company was making steady progress with the construction of their new Maintenance, Repair & Overhaul facility (MRO) at their Ikeja base, adding that the timeline for delivery of the MRO is still on track for end of 2017.