Ardova Plc (AP) announced the release of its 2021 Audited Financial Statements and Q1 2022 Unaudited Financial Results. 

The company posted a profit of N1.54bn in the year ended 31st December 2021. However, losses from subsidiaries Axles and Cartage, and newly acquired Enyo Retail and Supply Limited led to the group’s net loss position of N3.8bn. 

In Q1 2022, AP’s performance shows significant improvements as yields from investments made in 2021 contribute to growth in revenue, sales volume, and profits. 

Ardova’s Chief Executive Officer, Olumide Adeosun, said; “2021 proved to be an eventful year for Ardova Plc, as it marked the completion of our stabilization strategy, with the consequently strengthened balance sheet providing the leverage for the inorganic expansion required to evolve Ardova into an integrated energy company”.

Highlighting parts of the expansion phase that became material in 2021, Mr. Adeosun stated, “During the year, we concluded a landmark capital raise of N25.3 billion in an oversubscribed bond that was the largest by any downstream company in Nigeria and an indication of investor confidence in Ardova’s future. 

“We also concluded the acquisition of Enyo Retail and Supply Limited (ERSL) in a deal that makes our retail network the largest in Nigeria. The company also made further investments in cleaner energy infrastructure, as it commenced onsite work on its 20,000 metric tonnes Liquefied Petroleum Gas (LPG) storage facility in Ijora.  Ardova won a license to operate an Oil Marginal Field following a successful bid in the 2020 round, thereby increasing the company’s potential for foreign currency revenue generation”.

Moshood Olajide, Ardova’s Chief Financial Officer noted, “The company continued to deliver on profits, as we ended Q1 with a profit-after-tax position of N1.6bn, which is a growth of 37% compared to the same period in 2021. We also continued to increase our capital expenditure, principally in investments that facilitate our strategic expansion, and we expect to see returns within a three-year window.”

Mr. Olajide further noted that Ardova’s Q1 2022 results showcased resilience as “We sustained competitive growth by increasing revenue by 21% Year-on-Year (Y-o-Y) (Group: 50% YoY), with the resulting profit of N1.6bn putting us in a 37% growth YoY position. As a group, we were negatively impacted by our subsidiaries, Axles & Cartage Limited, which faced operational environment issues, and the newly acquired Enyo, which is presently undergoing a transformation process to drive operational efficiency and profitability”.

When subsidiaries are taken into consideration the group loss amounts to N3.8bn. Responding to that, Mr. Adeosun stated, "the loss experienced in 2021 are an expected reflection of the strategic inorganic growth programme of the company, and do not affect the viability of the company, especially as some of the immediate benefits of this programme were illustrated by the better year on year performance recorded in our Q1 2022 results.” 

He also noted that once fully integrated, the acquisitions alongside the AP Renewables subsidiary will provide and safeguard the group’s capacity to thrive as global energy consumption tilts to cleaner sources. 

Highlights:

Earnings Highlights 

Income Statement for the period ended 31 March 2022 

• Revenue of N50.57 billion, up 21% y-o-y (Group: 62.93bn) 
• Gross Profit of N4.82 billion, up 51% y-o-y (Group: N5.42bn) 
• Net finance cost of N1.03 billion, up 462% (Group: N1.61bn) 
• Profit before tax of N1.60 billion up 37% (Group: N0.19bn) 
• Earnings per share of N1.23 (Group: N0.15)

Statement of Financial Position

• Shareholder funds of N21.12 billion, up 8% y-t-d (Group: N17.30bn) 
• Total assets of N127.95 billion, up 25% y-t-d (Group: N127.29bn)

Key Ratios

•     Gross margin: Group 9%, Company 10% (Mar 2021: 8%) 

• Return on average equity: Group 1.1%; Company 7.9% (Dec 2021: 12.8%) 
• Operating expenses/Revenue: Group 6%, Company 4% (Mar 2021: 5%) 
• Interest cover: Group 1.1x; Company 2.5x (Mar 2021: 7.4x) 
• Gearing ratio: Group 326%; Company 153% (Dec 2021: Group 342%; Company, 160%) 
• Total Asset/Equity: Group 7.4x; Company 6.1x (Dec 2021: Group 7.4x; Company, 5.2x)