PetroSA, South Africa’s National Oil Company (NOC), has continued to perform admirably, achieving a R593 million net profit for the 2012/13 financial year, despite volatile macro-economic conditions.
The 2013 net profit is however lower than the 2012 reported profit of R1, 2 billion. The NOC has attributed 2012/13’s sluggish performance to challenging macro-economic conditions, lower-than-anticipated production at the Mossel Bay Gas-To-Liquids (GTL) Refinery and increased operating costs.
Webster Fanadzo, PetroSA’s Acting Chief Financial Officer, has cautioned that although the NOC’s financial position remains strong, it is facing financial pressures.
“The Group’s financial position remains strong with total assets of R34, 2 billion (2012: R26, 4 billion) and a cash balance of R7, 4 billion,” he said.
“An aggressive capital expansion program, which includes the Project Ikhwezi offshore development project, and the envisaged acquisition of a downstream operation, will significantly change this scenario, as the Group is set to move from its current low-geared position to one in which it takes on more loan financing,” Fanadzo added.
In the year under review PetroSA also significantly increased its revenue from R14, 4 billion in the 2011/12 financial year, to R19,6 billion. The main drivers for this increase were the Rand weakness against major currencies, improved local trading of finished products and the addition of new revenues from the acquisition of oil reserves in Ghana during September 2012. Cash from operations also increased to R3,8 billion, from R1,5 billion.
During the 2012/13 financial year, the NOC invested R3,7 billion on Project Ikhwezi, the flagship offshore development to produce and supply gas feedstock to the company’s Mossel Bay GTL Refinery. This was up from R601 million in the previous financial year.
PetroSA continues to actively support Broad-Based Black Economic Empowerment (BBBEE). Payments to BBBEE suppliers with a minimum of 25, 1% black shareholding increased to R4,3 billion, up from R 2,8 billion in the prior year. This impressive year-on-year increase of 50% signifies PetroSA’s ongoing commitment to economic empowerment.
Nosizwe Nokwe, PetroSA Group CEO, said the increase in capital expenditure on projects would in the short-term result in a diminished bottom-line. She however remains confident that in the long-term these initiatives would deliver sustainable returns.
“A very notable success over the past year, and in support of PetroSA’s long-term strategy, is the R232 million operating profit contribution, during the second half of the financial year, resulting from the acquisition of oil reserves and related production in Ghana,” she said.