?Ghana Oil Company Limited (Goil) reported an impressive corporate performance as per their third quarter financial report as the company made its highest third quarter sales in the last five years.
The oil marketing company grew its revenue by 28 percent in 2013 mostly due to the increase in price of petroleum prices as well as the divesrsity of its product line and services presently. GOIL ended the third quarter with a total amount of GH?734.65 million in sales and incurred GH?691.80 million as costs of sales. GOIL?s cost of sales also grew almost proportionate to turnover with the company having to deal with the increasing trend in fuel prices.
After deducting the cost of sales from the revenue from the company?s operations, the company managed to keep 5.83% of its sales as gross profits which is a normal case for most OMCs in Ghana. A 25% increase in operating expenses notably selling and administrative expenses took a chunk of the company?s gross profits leaving the company with only 1.55% of its revenue as net profits after tax.
For the third quarter ending Semptember 2013, GOIL saw its profit after tax soaring by 46% at GH?11.42 million mostly driven by sales. This translates into an earnings per share ratio of GH?0.0543 for the third quarter of the year (GH? 0.0372 for the third quarter 2012) . GOIL?s third quarter earnings per share ratio have consistently been rising in the last 5 years shedding some more light on the profitability trend of the company.
We expect some improvement in GOIL?s topline in the last quarter of the year on the back of increments in petroleum prices due to the pass through effect of the removal of government subsidies on petroleum products. This is also expected to translate into the improved profitability In the third quarter while the company seeks to reap some benefits from its other businesses like the aviation fuel and the bunkering services.
GOIL?s financial position for the third quarter improved significantly compared to the prior period in 2012. A 79% growth in Property, plant and equipment and a 72% surge in stocks compared to the prior period saw GOIL?s total assets move up by 38% whereas a significant surge in accounts payable saw total liabilities rise by 42%. Nontheless, net assets or shareholders? fund grew by 30% supported by a 48% increase in income surplus while stated capital remained unchanged at GH?11.81 million.
????????????????????????? GOIL?s price movement from Jan 2008 to September 2013
GOIL has perfromed creditably well on the exchanges since listing on November 16, 2007. From an IPO value of GH?0.20 a share, GOIL has seen some volatility over the years while other investors with some risk appetite would have made some significant gains over the years.
The share value of GOIL dipped to a record end of year low of GH?0.17 a share and touched an all time end of month high of GH?1.40 a share in May 2013 giving investors the possibility of reaping a staggering retun of 724% within the stated period.
Nonetheless, GOIL has returned an annual average of 31% to investors since listing which is relatively higher than other investment vehicles on the market. For the nine month period ending september 2013, GOIL saw its share value move from GH?0.62 a share to GH?0.90 representing a YTD of 45%.
GOIL is presently trading at a P/E of 16 compared to the market average of 15 (excluding GGBL?s P/E). This makes GOIL?s share value faily valued on the market at 92p a share. We expect GOIL to close the year between 90p and 95p band looking at the current market trend and GOIL?s historical end of year performances.
