HARD TIMES FOR INDIGENOUS SHIPPING OPERATORS Japaul, maritime industry’s only publicly quoted firm, suffers 144% drop in profit

Shareholders of the only maritime company quoted on the Nigerian Stock Exchange, Japaul Oil and Maritime Services Plc, may be in for a bad year as its nine months financial result has shown a declining fortune in consolidation of its streak of negative performances.
The company’s unaudited financial statement for the period ended September 2013 showed that its profit after tax declined significantly by 144.6 percent over the period, even as its cost of sales recorded increase.
This is in spite of the assurances given by the chairman, Major General Joseph Omosebi (rtd), at the last annual general meeting with shareholders of possible return to profitability after a negative outing in 2012.
The once promising company’s profit before tax slumped to N485.5 million from N1.397 billion, while the profit after tax fell to N485.5 million from N1.19 billion in nine of 2012. It cost of sales grew to N4.51 billion from N4.4 billion in equivalent period of 2012, showing inefficiency in use of resources.
A further look at the results pointed to a company in financial distress as interest on loans rose to N546.76 million from N220.23 million, indicating an urgent need of fresh capital injection.
However, the turnover for the period grew marginally by 0.7 percent to N9.61 billion from N9.54 billion in 2012. General and administrative cost also improved marginally, rising from N3.544 billion in 2012 to N3.416 billion in the review period.

The recent results could be a pointer to the fact that the company was yet to recover from adjustments made for depreciation and newly-introduced policies for preparations of statutory financial reports as alluded to by the chairman, which he said were responsible for the drastic decline in the profit of the company in 2012.
Explaining the ballooning finance charges, Omosebi had explained that some of the new vessels acquired during the year were financed with loans from the bank, “hence the high amount of interest that we paid during the year.”
SHIPS & PORTS DAILY had reported exclusively in its edition of 9th September, 2013 that no fewer than 90 per cent of shipping companies owned by Nigerians have either completely shut down their operations or were barely struggling to survive.
Out of 12 indigenous shipping companies surveyed by SHIPS & PORTS DAILY, only two were found to be operating viable businesses while the 10 others, representing 83 per cent of the companies surveyed, were either completely dead or were in comatose condition.