Foremost ratings and research agencies, Agusto & Co. and Global Credit Rating Co. (GCR), have affirmed Forte Oil Plc investment grade rating.
In addition, both agencies stated that the long term outlook for the oil and gas company remained stable.
A statement yesterday revealed that the above credit ratings were accorded to Forte Oil Plc based on the companyâ€™s top-tier position in the Nigerian downstream sector, underpinned by a strong and visible brand, significant assets across the energy value chain, and strong relationships with suppliers, strong corporate governance framework, and an experienced and stable management team.
Commenting on this feat, the Group CEO, Forte Oil, Mr. Akin Akinfemiwa, said: â€œThis is an affirmation of trust in the company. It further reinstates that the company is on a solid financial footing and is navigating the difficult business environment within the country today through prudent management and presence in strategic parts of the energy value chain.
â€œThis rating provides additional comfort to all stakeholders that their investment in Forte Oil is safe and secure in line with our vision of being the investment of choice in the energy sector.â€
Forte Oil had reported improved results for the first quarter (Q1) ended March 31, 2017. It reported profit after tax (PAT) of N1.9 billion in Q1 of 2017, showing a jump of 98 per cent from N1 billion recorded in the corresponding period of 2016.
In all, Forte Oil had recorded a revenue of N33 billion, down 7.3 per cent from N35.67 billion. Cost of sales was reduced by 11.7 per cent from N30.8 billion to N27.2 billion, while distribution expenses was reduced by 45 per cent from N911 million to N501 million, leading to a growth of 20.8 per cent in gross profit to N5.8 billion, from N4.8 billion in 2015.
Operation expenses had also declined by 9.8 per cent to N2.8 billion, from N3.1 billion, net finance cost rose by 37 per cent from N1.1 billion to N1.6 billion. The company posted post tax profit of N2.0 billion, up 57.5 per cent from N1.3 billion. A reduction in tax by 52 per cent from N300 million to N200 million made the profit after tax to grow fast to N1.9 billion in 2017, compared with N1.0 billion in 2016, showing a jump of 97.5 per cent.
In bid to reduce its finance cost, Forte Oil Plc last year raised N9 billion bond under its N50 billion bond issuance programme, to refinance existing short term commercial bank loan obligations. The funds were also meant to refinance its retail outlet expansion.
The company has three main subsidiaries which are the downstream subsidiary, the power generation and Upstream Services. The downstream business operates a network of 500 retail outlets spread across the Country with major fuel storage installations at both Apapa (Lagos State) and Onne (Rivers State).
This subsidiary also markets a premium grade lubricants manufactured from its Lube Blending plant located in Apapa, Lagos State. The Plant has the capacity to produce 50,000 metric tons of over 100 different grades of lubricant oils annually. Its Aviation Terminal in Ikeja and Joint Aviation depots in Abuja, Port Harcourt and Kano makes it one of Nigeriaâ€™s leading providers of aviation fuel for local and international airlines.
The company in 2013 acquired a 51 per cent stake in the Geregu Power Plant located in Kogi State along with its partners including Shanghai Municipal Electric Power Company (SMEPC). The power plant has a generating capacity of 435mw and has just undergone a successful major overhaul.