Caverton Group classifies its business as Nigeria’s leading provider of marine, aviation and logistics services to local and international oil and gas companies in Nigeria. Intuitively, one can assume that the business performs well when oil and gas firms perform well and poorly when oil and gas firms struggle. However, recent results suggest otherwise.
The company recently released its 2021 FY results revealing it recorded a whopping loss after tax of N4.3 billion compared to a profit after tax of N1.1 billion in 2020 which ironically was a Covid-19 year. That year, the result was a 74% drop from the N4.3 billion profit reported in 2019 which was its best year yet. Well, 2021 has now seen things go from bad to worse with its worst result in at least 5 years. So, what happened?
According to the company, the loss was due to the impact of the “Covid-19 pandemic” and other factors which it claims had “negatively impacted business operations in Nigeria and the rest of the world” thus leading to the losses. As they say, the devil is in the details. A cursory review of the company’s financial statement reveals the losses were due to a spike in its cost of sales, the direct cost of doing business.
