GOIL records highest profit growth since 2016

GOIL records highest profit growth since 2016

GOIL Company Limited now GOIL Company Limited (PLC), has recorded its highest growth in 3 years.

The company whose share price witnessed a drop of about 45 percent in 2019, said its impressive performance should improve demand for its shares which will boost its share valuation on the Ghana Stock Exchange.

The company reported a profit after tax of over GHS105 million, up by 29% when compared to the over GHS81million reported in 2018.

The growth in the company’s net profit after tax is the second-highest in 4 years falling behind the 35.6 percent growth reported in 2016.

In his address at the company’s 51st AGM, the Board Chairman Kamena Bartels announced that despite the impressive performance the company was retaining a considerable amount of the earnings per share to help finance key projects.

“Earnings per share moved from GHS0.209 to GHS0.269. Total asset increased from 1.345 billion cedis to approximately 1.716 billion cedis. The Company has embarked on projects that have the potential to yield higher gains in the future. For this reason, the board has decided to retain a considerable amount of the earnings per share to help finance the projects. Recommendation for dividend per share is GHS0.045 as against 0.042 in 2018.”

Despite the performance in 2019, the company has experienced some demand challenges as a result of the impact of COVID-19.

Goil started the year dispensing 33.7 million litres of petrol in January.

Following the implementation of COVID restrictions in Ghana that amount dropped to 22 million litres of petrol in April.

The Group CEO and MD Kwame Osei-Prempeh expressing optimism about the company’s fortunes for the rest of 2020 said: “2020 has been very challenging because of the COVID-19 outbreak and the lockdown. But GOIL being what it is we are catching up. The figures after the lockdown are very impressive and we expect them to improve. We are confident that by the next AGM in 2021, our key projects like the Bitumen project which is ongoing and would be operational during the year 2021, as well the construction of cylinder refilling plant would all boost the confidence in our company.”

The company’s share valuation on the Ghana Stock Exchange from January to August 19, dropped by 11.8 percent.

But According to the Chief Operating Officer of Goil Mr. Alex Adzew, the poor liquidity caused by COVID 19 pandemic as well as the financial sector difficulties can be blamed for that dip.

“The capital market is skewed towards long-term investment, whiles the money market is for short-term. Anytime people have challenges in the money market they turn their attention to the capital market by selling off their stocks, and that is what we are seeing. People are having challenges securing their monies from the money market. So we can see people supplying or dumping more stocks than the market wants leading to the drop in our share valuation.”

Source: www.citibusinessnews.com