The management of Forte Oil have announced plans to carry out a major overhaul of its Geregu power generation plant within the next 8 months. Group CEO Akinsola Akinfenwa, revealed the company’s intention today at Forte Oil’s Fact Behind The Figures presentation at the Nigerian Stock Exchange. [upme_private]
Akinfenwa highlighted to market-makers and other stakeholders, the challenges being experienced in the power generation arm of the sector, originating from the delayed kick off, of the Transitional Electricity Market which is expected to come online in September 2014.
Akinfenwa noted that the board had approved the raising of the $90 million needed to carry out this overhaul, that would bring the plant to a 100% capacity of 414MW. Recall that Forte Oil through its subsidiary Amperion Power, in a competitive bid, won the rights to purchase the power generating asset, which is currently at 60% capacity.
The plant has 3 turbines, namely GT11, GT12 and GT13, all having rated capacities of 138MW each, and is said to have one of its turbines, currently down, because it had attained its maximum generation limit.
The board, decided the best action was to carry out the overhaul which would bring it back to maximum capacity, instead of forcing operation, which could lead to damage of the turbine.
Speaking on all its other business concerns, which the company believes positions it as an Integrated energy service provider, Akinfenwa said the company had been working at expanding its downstream presence, which boasts of over 500 retail outlets across the country, while using its service stations to sell its lubricants and tap in to its Non-Fuel revenue. He also mentioned how the company had won a bid to supply AGO to one of Africa’s biggest conglomerates; a deal which according to Akinfenwa, was a huge success to their downstream operations.
Forte oil continued with its transformation, recording an enormous 2014 first quarter growth from top line to bottom line. The company’s revenue grew by 30%, posting N34bn, with PAT also growing by 108% to 1bn.
It has a PE of 146.7 with an estimated 2014FY PE of 36.57 which makes the company look expensive, however the high PE could also represent investors anticipation of further growth in the company fortune as the share price has appreciated from N35.7 to a 52wks high of N259.9 in the last one month, a 528% return.
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