Conoil Nigeria Plc intends to reward shareholders with a dividend of N1.40 billion for the financial year ended 31st December 2017, amid daunting economic challenges.
This translates to N2.00 on every 50 kobo ordinary share. A payout ratio of 88.15 percent and yield of 9.50 percent means the company has an aggressive policy that continues to allure institutional investors. Between 2012 and 2016, it has paid a total of N8.4 billion as dividend.
The proposed dividend is expected to be ratified by its shareholders at the Company’s next annual general meeting in Uyo, Akwa Ibom State.
Conoil’s cash reward to its owners for the financial year beats analysts’ expectation as they had envisioned that federal government protracted delay in the payment of subsidy monies could undermine petroleum oil marketers’ financial potency.
Shareholders and investors of Conoil need not fret as the firm is on the path of growth as it trimmed debt with a view to bolstering cash flow.
There has been an improvement in three key leverage ratios- debt to equity, debt to assets, and interest coverage ratios.
Conoil’s debt to equity ratio fell to 28.90 percent in December 2017 from 48.70 percent as at December 2016.
Debt to assets ratio declined to 8.33 percent in the period under review from 12.83 percent the previous year.
Total debt in the balance sheet fell by 42.55 percent to N5.17 billion in December 2017 from N9 billion the previous year.
Conoil’s time coverage ratio is 2.07 times earnings, which exceeds the 1.5 times benchmark. In other words, the company’s operating profit can cover the interest expense.
Modest leverage is also a lynchpin of corporate quality, along with high profitability and stable earnings — and investors rightly look to corporate quality for protection during downturns. By these quality measures, investors appear to have little reason to fret.
Conoil’s revenue increased by 35.64 percent to N115.51 billion in December 2017 from N85.02 billion the previous year. It said all sales are from a petroleum product.
In a statement, the Company attributed the performance to its sustained culture of financial discipline, prudent and efficient execution of projects and plans, aggressive product development and marketing, supported by cutting-edge customer service delivery.
While assuring that its promise to her shareholders remains maximum value, it reiterated delivery of excellent service and products to its customers.
The company share piece closed at 31.80 percent as of 2:00 Friday on the floor of the exchange, valued at N22.06 billion.
SOURCES:BUSINESSDAYONLINE
