Shareholders of 11PLC on Friday commended the management of the company for a superlative performance in 2024 despite the challenges in the country’s economy during the year.
Several shareholders said the management’s deserves special commendation for the approval of 925 kobo per share dividend payout to them during the year other operators in the downstream sector of the petroleum industry could not do so.
The shareholders made their views known during the 47th Annual General Meeting of the company in Abuja on Friday.
Olusegun Owoeye of the Central Shareholders Association who spoke first during the meeting commended the management of the company demonstrated excellence in running its affairs, particularly in sustaining the momentum and positive outlook since the acquisition of Mobil Oil Nigeria, describing its performance as encouraging.
Owoeye, who noted the impact of the Petroleum Industry Act (PIA) on the industry since its enactment, said the management of the company in particular did exceptionally well in meeting its obligations under the new regulatory environment.
Apart from the management’s achievements, Owoeye said its impactful performance, in terms of the continued discharge of its Corporate Social Responsibility (CSR) to the communities in the immediate areas of the company’s operations, was commendable.
Also speaking during the meeting, Okezie Abraham, who applauded the management of the company for its exceptional performance during the year, said regardless shareholders were still expecting a better package in terms of better dividend payout next year.
Another shareholder, Zarma Mustapha, who also spoke in glowing terms about the management’s performance said they deserved the support and encouragement of all shareholders to continue to meet their expectations in the face of the challenges posed by the crisis in the economy.
Responding to observations and questions by the shareholders, the Managing Director/Chief Executive officer of the company, Adetunji Oyebanji, said the enactment of the PIA created both negative and positive impacts on the operations of the company during the year.
Apart from the full deregulation of the operations of the downstream sector of the petroleum industry, which came with the enactment of the PIA, Oyebanji said the new operational legal framework increased the retail pump price of premium motor spirit (PMS) also known as petrol to an average of N1000 per litre.
The significant increase in the pump price of petrol in the country, he noted, resulted in an increase in the company’s revenue realized from the sale of petroleum products, adding that this translated into the company revenue rising from N526.5 billion in 2023 to about N913.66 billion in 2024.
However, he said the increase in revenue did not translate to a higher profit, in terms of the volume of products sold, as the high cost of sales and other operating expenses as a result of the high inflation in the economy negatively impacted the profit realized by the company during the year.
“During the year, inflation averaged 36 percent. This resulted in increased cost of doing business. Consequently, despite the increase in revenue, which resulted in the increase in the dividend payout to shareholders, the high cost of sales and operating expenses significantly affected the profit declared for the year,” he explained.
On the impact of the PIA, the MD said the policy of total deregulation of the downstream sector of the oil industry brought about competition among the operators, who strived to control a significant portion of the product supply market.
He said the competition among petroleum products marketers has recorded some benefits to consumers, who, apart from not experiencing incessant products supply shortages and long queues at filling stations, as was the case before the introduction of the PIA, now enjoy more efficiency in service by marketers and better products quality.
On the company’s CSR performance, the MD assured the shareholders that his management would continue to do more within the limits of available resources to give back to the people.
Reacting to allegations of scarcity of the company’s premium product, Mobil Super, in the marketplace, the MD said it was deliberate policy of the company to be careful not to allow the products to be sold in every shop and outlets across the country to check adulteration of its quality.
In his Statement, the MD said despite facing strong economic headwinds during the year, the company managed to achieve moderate, yet significant growth, compared to its competitors in the industry.
The deregulation policy in the downstream sector of the petroleum industry, he said, introduced new opportunities for competition, transparency and efficiency, adding that while market-based pricing established a pathway for stability and equitable distribution of products across the value chain, the commissioning of the Dangote Refinery altered the industry dynamics.
Given the new market dynamics, the MD said the management was compelled to take proactive actions to address the challenges posed, which resulted in the company’s profit margin being adversely impacted, as a lot of resources had to be invested in the provision of infrastructure to improve the company’s services.
At the end, he said the company’s turnover for 2024 stood at about N892 billion over N513 billion realized in 2023, with profit after tax at N16billion, compared to N25billion for 2023.
Earlier, the Chairman of the Board of Directors of the company, Ramesh Kansagra, in his statement read during the meeting stated that the country observed significant developments during the year as a result of the Federal Government initiatives to enhance the growth of the sector, address challenges and leverage natural gas potentials.
He said as a leading producer of lubricants under the Mobil brand, the company continued to innovate and expand its offerings to meet the growing needs of consumers, adding that despite enormous challenges, the company made substantial investments in infrastructure development to upgrade its storage facilities and expand its distribution network.
“These investments have enhanced our operational efficiency, broadened our product range and strengthened our ability to meet the evolving needs of our customers,” he said.
He said the company committed to maintaining its growth momentum through strategic initiatives by focusing on delivering outstanding customer service, expanding products portfolio and investing in both the people and infrastructure.
