MANAGING DIRECTOR’S FORWARD
Distinguished Shareholders, Ladies and Gentlemen
I am particularly delighted to, once again, welcome you all to the 15th Annual General Meeting [AGM] of NIPCO Plc. This statutory meeting offers veritable avenue to share thoughts on your company over its operations in the Financial Year ended December 31st, 2018 and the company’s outlook for the current year – 2019.
I wish to acknowledge your unwavering support via your investments in the company and your loyal patronage of the organization’s petroleum products marketing business.
With my second successive year in the leadership of the company, I have been able to firm up the administration in a way that each and every member of the NIPCO family possesses greater sense of belonging in the overall interest of the company.
REVIEW OF 2018 OPERATIONS
Fifteen years of operation in a stormy industry such as ours is great achievement worthy of applause. The period under review being the preceding year before the 2019 General elections was characterized by cautious investments thus taken a general toll on the economy. The expected passage of the Petroleum Industry Governance bill did not materialize with the industry still in want of a robust policy capable of putting the industry on a solid footing for the future. Job security is becoming a mirage in the sector, a feat that might have a bleak impact on the economy.
The sector had remained regulated leaving the National Oil Company, the Nigerian National Petroleum Corporation (NNPC) as the sole importer of Premium Motor Spirit [PMS], popularly called petrol.
With the continued regulation of the sector as against deregulation, operators had no control on margins as turnover is shooting up with no concomitant improvement on profit.
Your company was, however, able to drive its growth plans through expansion of some of its core business activities and a backward integration of its business lines. Management has continued to make more investments in the white and gas business to boost more revenues and deliver significant returns to you all. We were able to optimize cost without necessarily sacrificing quality service delivery.
NIPCO sustained its steady growth through strategic implementation of the promoter’s intent hinged on exploring opportunities in the hydrocarbon industry with a view to exceeding customer’s expectations.
Our growing performance in the industry is a testimony to the faith you reposed in the new management during the year.
I have no illusions whatsoever that there are still lots to be achieved in our quest to remain one of the benchmark companies in the industry.It is gratifying to note that one of the major drawbacks in the sector in the year under review was the subsidy arrears a challenge which was redeemed by the government towards the end of the year.
The overall performance of the company is commendable as evidenced in the year on year growth, which further demonstrates the strength and quality of the company’s business strategy to providing exemplary services in the oil and gas industry.
CORPORATE SOCIAL RESPONSIBILITY
Central to our company’s CSR approach is our strive to be the preferred partner in the communities in which we operate.
Our continuous investment in community programs validates our commitment to providing opportunities and improving living conditions in our host communities. Regular consultations are undertaken with host communities to assist in identifying projects and actions that could impact positively on the populace.
In the year under review, one of such consultation resulted in the organization of a Security Workshop for teachers, pupils and guards in public primary schools in the state.
Promoting an enduring and safe environment especially in the nation’s education sector is a task that cannot be left to government alone; hence the decision of NIPCO Plc to partner with the Lagos State Universal Basic Education Board, which attracted hundreds of participants.
Our yearly benevolence to children’s of SOS Village was also undertaken in 2018 with the donation of food items and household needs. Nipco’s CSR initiatives were given fillip in the year under review with rehabilitation of Dockyard road, Apapa by the company. The underlying principle of our social investment is that our operations are not just about the bottom line alone but for service to humanity.
AWARDS AND RECOGNITION
Your company was bestowed with scores of awards ranging from recognition from the media to safety and investment in the sector in 2018.
At the Guardian Oil & Gas Round-table and Awards NIPCO carted two awards namely – Oil & Gas Health & Safety Company of the year [Downstream] ;Oil and & Gas Local Content Compliant Company of the Year [Downstream] out of the eight categories of awards at the prestigious event.
The company’s safety compliance prowess was also recognized at the yearly Nigeria Ports Authority awards for HSE compliant depot in Lagos port complex.
OUR EMPLOYEES
We have continuously placed high premium on our human capital whose hard work, perseverance and utmost dedication immensely contributed to the organization’s performance in 2018.
It is instructive to note that in spite of the daunting challenges in the hydrocarbon industry, your Company has ensured security of staff employment even as we strive to continually improve their well-being. Our employees are pivotal to the company’s success, a feat that is commendable and pleasing.
FUTURE OUTLOOK
In pursuit of our resolve to be relevant in the industry, our backward integration blueprint would be further intensified with a view to making it impactful on our balance sheet in 2019.We will also remain focused on delivering on our strategic objectives of being company of first choice in the industry with the ultimate aim of generating more values for our shareholders and stakeholders in general.
Your company is thinking of venturing into LPG production against the background of the nation’s richness in natural gas. In the near future, we would be going into its production .The strategy to diversify and grow our streams of income through the expansion of the company’s oil and gas business would gain more momentum. Currently in LPG storage space, NIPCO does not only possess the largest capacity but also are the most active as well as the supplier of choice for LPG. Our shareholders will continue to smile with good returns on their investment year in year out.
Our growth plans for the future would be hinged on focused implementation of our strategic intent of exceeding customer’s expectations in all our line of businesses.
APPRECIATION
My deep appreciation goes to you all for your investment and growing faith in the management over the years. The Board and Management remain major pillars in the success story of the company, hence a big kudos to them.
Stakeholders in the hydrocarbon industry including Federal Ministry of Petroleum Resources, Nigerian National Petroleum Corporation [NNPC], Department of Petroleum Resources [DPR], Petroleum Products Pricing Regulatory Agency [PPPRA] and the Debt Management Office [DMO], have also been very supportive to the company, a feat we appreciate a lot.
Best regards,
Sanjay Teotia
Managing Director