Caverton Offshore Support Group Plc, provider of marine, aviation and logistics services to local and international oil and gas companies in Nigeria is expecting to report lower earnings for the half year ended June 30, 2016.
In a profit warning notification to the Nigerian Stock Exchange (NSE), Caverton said the lower earnings are being envisaged largely due to the unavoidable impact of the recent Naira devaluation, which took place within the second quarter of the year.
According to the company, the impact of the recent devaluation by the Central Bank of Nigeria (CBN) is 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.
“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.
Caverton had recorded a decline of about 36 per cent in profit before tax (PBT) for the first quarter ended March 31, 2016. PBT fell from N2.501 billion to N2.334 billion.
The company’s fortunes are being affected by the challenges facing its clients in the oil and gas sector due to the fall of crude oil price at the international market, a situation that made the company mull 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 its 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.