Forte Oil Stock Performance LAGOS – Trading at N26.55, the Forte Oil stock has lost some grounds relative to the price on Christmas Eve, when it sold for N31.25, meaning investor apathy based on election fears is taking hold.
After Friday’s trading, the oil and gas company lost almost N5 relative to its December 24th price.
Despite the shave in prices, the stock still outperformed the All Share Index (ASI) in the last six months. While the stock returned a positive 9 per cent, the market returned a negative 16 per cent.
The trend has been since December where the stock outpaced the market. At that time, the stock returned 7 per cent while the market returned a negative 8 per cent.
For a stock whose fortune is tied to the ups and downs in the oil and gas market and selling at a multiple of …, there appears to be good prospects ahead with the crises in Venezuela and OPEC supply cuts, although slowdown in China may give cause for concern.
While waiting to see the company’s full year report, we want to remind ourselves that in the nine months ending September 2018, Forte oil raised revenue by an impressive 39.4 per cent to N94.81 billion from N68 billion, but steep rise in the Cost of Goods Sold (COGS) by 42.4 per cent to N86.4 billion from N60.64 billion ate up the resultant gross profit to N8.5 billion from N7.4 billion, a marginal rise of 14.5 per cent. The rise was too little as gross profit margin shrank to 8.92 per cent from 11 per cent.
Even though the company upped operating profit 78.2 per cent to N2.56 billion from N1.44 billion, its operational efficiency suffered a setback, retracting to 2.7 per cent from 2.11 per cent.
Management succeeded in controlling finance costs, helping to put pre-tax profit in positive territory as the figure jumped to N376 billion from a loss of N4.74 billion. The positive result impacted pre-tax margin pushing it up to 0.39 per cent from a negative 0.7 per cent.
The company’s bottom line benefitted from the positive pre-tax results, turning from losses of N626 billion to profit of N78.73 billion. This helped net profit margin rise to a near insignificant 0.08 per cent from a negative 0.92 per cent, which is a loss against an inflation rate above 11 per cent that prevailed in the period.
In the first half of the year, […]
