Forte Oil PLC, a major player in the downstream petroleum sector has reported that its net profit for the third quarter of the year fell by 43% when compared to its performance last year.
The slide in financial fortune for Forte Oil could be attributed to the worsening economic challenges in Nigeria. This is because the company reported a higher gross revenue of NGN121 billion versus NGN91 billion recorded last year.
Nigeria’s Forex crisis and massive inflation also affected Forte Oil most within the quarter. Cost of sales rose by 35% to NGN105 billion compared to NGN78 billion it expended last year.
Administrative expenses for the quarter was reduced to NGN7,3 billion. Last year same quarter, the company expended NGN8,1 billion. This does not suggest that Forte Oil must have cut some jobs within the quarter, but it has reduced costs across board on the item. Actually, its personnel expenses has increased to NGN1,9 billion from NGN1,6 billion paid last year.
Due to massive impairment the company suffered from FX volatility plus Naira (NGN) devaluation, loans and borrowing has increased to NGN26 billion from NGN13 billion posted last year. The impact on this on the business would require raising additional capital for the business.
As a result of the negative impact, the company’s asset base. Total current asset for the period slightly rose to NGN64 billion from NGN57 billion.