L-R: Chief Operating Officer, Ramesh Virwani; Company Secretary, Chris – Olumayowa Meseko; Alternate Chairman, Abdulkadir Aminu Mamman, and Paul Chukwuma Obi at the end of the meeting in Abuja.
11 PLC (formerly Mobil Oil Nigeria) says it was well-positioned to take advantage of every business opportunity that would emerge under policies being proposed by the government in the downstream sector of the petroleum industry during the year and beyond.
The Managing Director/CEO of the company, Adetunji Oyebanji, disclosed this during the company’s 45th Annual General Meeting (AGM) held at Abuja Continental Hotel where shareholders hailed the company’s positive performance during the financial year despite the challenging operating environment.
“We are fully set for whatever policy directives the federal government is considering with regards to the downstream sector of the petroleum industry. We are well positioned and poised to take advantage of every opportunity in the overall interest of our esteemed investors and customers alike,” he said.
Apart from the implementation of the provisions of the Petroleum Industry Act (PIA) 2021, which would usher in the introduction of the full deregulation policy in the downstream sector, the Federal Government plans to effect the removal of subsidy on premium motor spirit (PMS), popularly called petrol, during the year.
With the government giving an indication that the policy on fuel subsidy, which was initially put on hold till after the end of the outgoing administration in June, Oyebanji told shareholders the company was already positioning its operations to take advantage of the opportunities that would likely emerge.
Apart from the upgrade on its operational facilities, the MD said the company was investing massively in the development of the capacity to participate in th Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG), targeted at positively impacting the company’s bottom line at the end of the year.
“With the imminent removal of subsidy on petrol during the year, the cost of doing business will definitely go up, and in such instance, the company might be forced to seek more funds to run the business, with internal funds earlier generated coming in handy as a buffer,” he said.
He pledged the company’s commitment to continually strive to improve the lots of its esteemed investors through regular payment of dividends and better returns on investment as the operating environment improves.
The dividend policy of the company, he explained, was to encourage saving for the rainy day, especially with eventualities like subsidy removal in petrol.
He promised that the company would continue to work to sustain an inspiring bright and fulfilling future for its investor in particular and the country in general.
On CSR, the MD said the company would look seriously into the suggestion on youth empowerment, even as the company has embraced the policy to catch them young policy in the area of sports development through the sponsorships of grassroots sporting activities over the years.
The Chairman, 11Plc, Ramesh Kansagra in his financial statement and reports for the year ended December 31, 2022, presented by a Non-Executive Director, Abdulkadir Aminu Mamman, reviewed the operational environment during the year, which impacted the company’s business.
The global operating environment during the year, he said, was affected mostly by the post-Corona Virus pandemic crisis, adding that he was confident about a gradual return to normalcy after the Russia-Ukraine conflict.
The conflict, he said, caused disruptions in key energy and commodities exports, resulting in heightened pricing pressures, and severe inflation that also affected Nigeria.
The Nigeria Bureau of Statistics (NBS) reported that inflation figures rose to 21.47 percent on a year-on-year basis in November 2022, compared to 15.4 percent recorded a year earlier.
The Chairman also spoke about other macroeconomic developments that affected the company’s operations, including the impact of the persistent currency depreciation and foreign exchange scarcity on the downstream sector of the petroleum industry.
Also, he said the high cost of funds, multiple tax regimes, insecurity across the country, epileptic power supply, and higher energy costs significantly affect the company’s business.
Besides, he said the implementation of key parts of the Petroleum Industry Act (PIA) 2021, particularly the deregulation of the downstream sector petroleum, which was deferred by the government, was likely to take off during the current year.
On the company’s performance, the Chairman said the challenging business environment enabled the Management and Board to come up with ideas on how to fix the downstream oil and gas business during the year to make it more functional.
For instance, he said during the year in which nationwide scarcity of petroleum products forced most operators out of the market and availability of aviation fuel became unpredictable with prices of diesel so high, the business became unattractive to consumers.
In the first quarter of the year, he recalled that the country witnessed the importation of adulterated petrol, which caused unprecedented disruption to product supply, with a significant impact on the company’s business.
Despite the challenges, he said the company has sustained a trend of impressive performance, resulting in the Board of Directors recommending a dividend pay-out of N3.065 billion, or N8.50K per ordinary share of 50 Kobo each, to its shareholders.
“The dividend payout of 850k per share under the current difficult business circumstances shows the company’s commitment to a positive return on investment to its shareholders. The Board is committed to delivering outstanding returns to our shareholders continually,” the Chairman assured.
On the outlook for 2023, the Chairman observed that although it may be difficult to predict what the country’s future would be, particularly in the downstream sector, in view of the difficult global operating environment, the company was determined to strive to weather the storm during the year.
He expressed optimism that the activities of the country’s downstream sector during the year 2023 would be impacted by the full implementation of the PIA, with deregulation scheduled to take off by June 2023.
The success of the implementation of the deregulation policy, he pointed out, would depend on proper planning by the government and the players, adding that Nigeria has bright prospects as a market to watch this year, because of the coming onstream of the Dangote Refinery, the change in government, and the proposed removal of fuel subsidies.
To keep the company on the path of sustainability, the Chairman said the company was committed to continuing the upgrade of its operational facilities, with investments in CNG and LPG, to positively impact the company’s bottom line at the end of the year.
Meanwhile, shareholders hailed the company’s positive performance during the 2022 financial year despite the challenges posed by the post-Corona Virus pandemic crisis and the Russia-Ukraine conflict on the global economy.
Different shareholders who spoke during the meeting described as impressive and heart-warming the dividend payout of N8.50k per share for the financial year.
Some of the shareholders said the performance vindicated their decision to support the new investor’s acquisition of a majority stake in the former downstream petroleum industry subsidiary of ExxonMobil Corporation in Nigeria.
A lawyer and Chairperson of Highly Favoured Shareholders Association, Adetutu Siyanbola, said the financial highlights of the company were quite impressive and gladdening to investors, even in the face of the country’s harsh economic realities.
Siyanbola said what was particularly interesting to shareholders was the meteoric rise in the revenue profile of the company, from 243,457,406 in 2021 to 371,899,701 the following year, a leap of about 53 percent.
Although she commended the company for approving a dividend payout of N8.50k per share for the financial year, Siyanbola appealed for the Board to raise it further, to put smiles on the faces of the shareholders.
She was however happy for the increased show of corporate social responsibility by the company, which has traversed several socio-economic facets of life of the populace, while urging for more youth empowerment by way of job creation for the teeming millions of unemployed youth across the country.
The Managing Director/Chief Executive Officer of Sani Yau Enterprises, Sani Yau Babura, said the company’s financial report presented by the Chairman of the Board vindicated the rising profile of 11Plc since 2017 when the new investors acquired a 60 percent stake of ExxonMobil in Mobil Oil Nigeria Plc.
The growth recorded so far since the acquisition of the company, he noted, was really not a fluke, but a strategic action by the company’s management and board through well-thought-out investment in both human and capital resources to reposition the business.
Citing some of the notable investments which are gradually yielding fruits, including the LPG plant, improved access to the domestic cooking gas market, and its re-entrance into the aviation market, Babura said these have ranked the company far ahead of the competition in the sector.
He also commended the management for the dividend payout for the year, saying it further shows the proactive actions by the Board, especially considering the urgency of saving for the rainy day, amid the rising cost of funds in the money markets.
“With more funds for the development of projects, the sky will be the limit for the growth potentials of 11Plc under the new management,” Babura said.
In his comment, the President of the Capital Shareholders Association of Nigeria, Augustine Ezechukwu, commended the communication between the company’s management and shareholders, which he noted has largely improved.
Ezechukwu said the dissemination of information regarding the operations and management of the company to shareholders has of late been very timely, accurate and continuous, citing the yearly annual report, he said, members got in very good time before the meeting.
He said the timely distribution of the Annual report gave members a sufficient opportunity to dissect the documents for a better-informed reaction during the meeting.
The return of investors forum, which provides shareholders room for more cross-fertilization of ideas between investors and management of the company, he noted, was also highly commendable.
