The recent global financial crisis and banking reforms in Nigeria have impacted negatively on African Petroleum Plc, as the petroleum marketing company has recorded a loss of N5.47 billion for the third quarter ended September 30, 2009.
According to the unaudited results made available by the Nigerian Stock Exchange (NSE), AP posted a turnover of N118.7 billion in 2009 as against N112.9 billion in 2008. But the company ended the period with a loss of N5.47 billion, compared with a profit of N5.1 billion in the correspondent period of 2008.
Although no official explaining could be obtained for the loss before press time, sources close to AP attributed the development to huge interest charges paid to banks on borrowings made for expansion and purchase of foreign exchange for the importation of petroleum products.It was gathered that in anticipation of its hybrid of share offers of 2008, AP took facilities from banks to finance its expansion and asset acquisition in a bid to become a leading player.
”But as you know the stock market meltdown did not allow the offer to succeed. Some banks that took part in the offer reneged in their underwriting agreements. Apart from that, AP had to repay those loans with high interest charges. The situation was aggravated with the banking reforms by the Central Bank of Nigeria (CBN), which made most of the banks supporting the company to recall their facilities. All these led to what you are seeing,” a source said.
The source recalled AP's disagreement with one its creditor bank-Access Bank, which led to litigation.“The year was really tough for the company but the directors are not relenting in their efforts to put the ugly situation behind them. Despite the financial challenges, AP has been ensuring that its customers do not suffer product shortage,” the source added.
This was obvious during the recent product scarcity when AP ordered 10 more cargoes of Premium Motor Spirit(PMS ). The Chief Operating Officer of the company, Mr. Tunde Falasinnu, had explained that the move ensured adequate supply and steady distribution of products to all the nooks and corners of the nation.He said that AP Plc was strategic in the efforts to ensure that petroleum products supplies reach all parts of the country, as the company has over 500 fuel retail outlets spread throughout the country as well as efficient transporters in its system that can ensure effective distribution of the product.