11 Plc (formerly known as Mobil Oil Nigeria) recently released its full year results for 2018. Revenue increased from N125 billion in 2017 to N164 billion in 2018, up 31%.
While profit before tax was flat, profit after tax rose by 24% to N9.3 billion in 2018, up from N7.5 billion in 2017. Note that this change is largely due to the absence of an exceptional item recorded in 2017.
Furthermore, the company declared a final dividend of N8.25 per share, up 3% from the N8 dividend declared in 2017. This also amounts to a payout ratio of 31.8% of its earnings.
In an excerpt from the Chairman’s statement, the firm gave an update on progress made since it re-entered the aviation fuel market last year.
“We are pleased to inform you of our entry into the sale and marketing of Aviation Turbine Kerosene (ATK) at our Ground Aviation Terminal, Lagos, in the fourth quarter of the year under review (2018). Currently, we service some major international airlines with their ATK requirements.”
The company also disclosed its plans to cover an even bigger part of the market.
“Plans for expansion to other major airport locations across the country will follow soon, as we seek to penetrate the local ATK market.”
11 Plc had, in November last year, announced the resumption of ATK sales in partnership with Air BP. The firm stated that it would construct a new 20 million litre aviation jet fuel (ATK) tank, as well as lay new ATK pipelines linking the company’s facility at Apapa with the Apapa Jetty.
Total in the Bullseye?: Existing players in the space could see their market shares whittled down. 11, being a major petroleum marketer, has access to funding lines that would enable it to push large volumes into the market, and sell on credit. While 11 Plc did not give a breakdown of its Aviation sales, dominant players like Total could witness a drop in their market share.
Total Nigeria Plc, another major marketer, made N20.3 billion from aviation sales as at the nine months ended September 2018. This marked an increase from the N12.5 billion recorded in the comparative period of 2017. MRS Oil Plc had a drop in revenue from ATK. It dropped from N7.4 billion in 2017 to N4.9 billion in 2018.
Revving the engine: The move into new markets has been a key move by the firm since NIPCO took a majority stake in 2017. In June last year, it announced the reopening of its Liquefied Petroleum Gas (LPG) business. The company last operated in this segment 20 years ago.