The Board of Directors of Mobil Oil Nigeria Plc. yesterday announced that the company had recorded a profit after tax of N8.15 billion in 2016. The shareholders of the company would be delighted at how the company was still able to record a 67% growth over its N4.87 billion earned in 2015. What exactly was responsible for this growth?
The Chairman/Managing Director of the company, Adetunji Oyebanji, who announced the figures behind the company’s 2016 FY results during Mobil’s yearly generally meeting in Lagos, attributed the increase to improved product margins and increased rental income from investment properties. Petrol pump price was increased last year from N97 to N145. According to him, the efficiency of the company’s blending operations was enhanced through its investment in a viscosity index improver for the blending of additives for the high volume lubricants.
“Our premium blend continues to differentiate us from the competition, attracting the patronage of customers. We continue to grow our lubricant volume through strategic partnership, deriving benefits from initiatives such as Mobil for Mechanics Training (MMT) Programme. We also recorded a significant expansion in our retail business through the addition of 34 dealers owned and operated sites and 14 reseller business to our chain.” Guardian quotes him as saying.
Oyebanji also assured shareholders that the company was also prepared to better its performance in the future through some strategic activities. One of these is the value enhancement of some of its property investments such as Mobil House in 2016 which was refurbished.
In addition, ExxonMobil and Mobil Oil are expected to enter into a 10 years lubricant blending and distribution agreement where Mobil Oil will become the Mobil lubes branded distributor in Nigeria and will manufacture and market Mobil lubricant in the country. This arrangement also comes with a five-year brand free agreement.
For shareholders of the company, the future seems very exciting as the management of the company seems to be prepared to adapt to the changing business climate in order to ensure sustained profitability. It is just like Oyebanji says “…ExxonMobil has changed its way of doing business in downstream in Nigeria.”
NIPCO investments, a subsidiary of NIPCO Plc had in April, took a 60% stake in the company in a deal valued at N90 billion. Mobil will subsequently be renamed 11 Plc, but the lubricant line will retain the Mobil brand. Rebranding costs in the short to medium term could lead to a drop in profits for the company. First quarter results for the company show a massive drop in profit before tac from N2.6 billion in 2016 to N43 million in 2017, due to an exceptional item of N2.2 billion which was caused by an increase in borrowing costs.