WorldStage Newsonline– The mission of Rak Unity Petroleum Plc which was incorporated in Nigeria as a private limited liability company on 20th December 1982 is to be a profitably run model petroleum and allied product sales operations in a manner that is environmentally sustainable and rewarding to all our stakeholders and vision is to be one of the leading retailers of petroleum products in Nigeria driven by excellence in our operations and customer service.
However, these mission and vision may no longer be realized as the board of directors of the company will be holding its 30th meeting on Friday, 30th October 2020 at Block 5, Water Corporation Road, Ijora G.R.A, Lagos by 12.00 pm to consider not only its third quarter result, but a recommendation to the shareholders to windup the company.
A notice filed by the company at the Nigerian Stock Exchange declared the commencement of a closed period for trading in its shares from 15th October 2020 until 24 hours after the outcome of the Board meeting have been announced to the Market.
Rak Unity Petroleum Company Plc sells and distributes a range of petroleum products in Nigeria and has business interests in storing oil, gas and kerosene. The company’s Bulk division sells petroleum products in bulk which includes premium motor spirits, automotive gas oil, dual purpose kerosene and lubricants.
In an indication that the decision to windup the company may be driven by unprofitability, the statement of profit or loss and other comprehensive income for the six months period ended 30 June 2020 showed a 60.05% crash in revenue to N1.161 billion from N2.905 billion in the same period in 2019 while loss was cut to N16.97 million from N32.66 million.
Specifically, the company recorded significant drop in revenue from AGO to N932.046 million in six months period ended June 30, 2020 from N2.409 in the same period in 2019 while revenue from PMS also crashed by about 50% at N208.159 million from N459.823 million.
The revenue came with huge cost of sales at N871.524 million in 2020 from N2.313 billion for AGO and N195.744 million from N437.810 million for PMS, leaving the company with very slim margins from its primary products.
The company deals in retail and bulk supply of petroleum products with principal activities being to carry on the business of petroleum sales, marketing, store oils, petrol, gas, kerosene, filling station, erect structures for that purpose.
The company normally leases its petrol-retailing stations. The leases typically run for 5 years, with an option to renew the lease after that date. Lease payments are renegotiated every five years to reflect market rentals. The lease agreements do not provide for additional rent payments that are based on changes in local price indices. The company is restricted from entering into any sub-lease arrangements.
There are indications that the company has not been expanding its business in recent years.
In fact, during 2019, two of the leased petrol-retailing stations were exited by the company, thereby leaving it with only four operational petrol-retailing.
The company in its Interim Report and IFRS Financial Statements (Unaudited) for the 6-Month period ended 30 June 2020 identified several risks to its operations, among which were Financial risk – include market risk (including currency risk, interest rate risk and other price risk ), credit risk and liquidity risk; Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices.
The company said it was also exposed to the risk of changes in market interest rates relates primarily to its long-term debt obligations with floating interest rates.
