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Ardova’s loss swells in Q3 to N4.3bn

Ardova’s loss swells in Q3 to N4.3bn
November 20
16:47 2022

Ardova Plc, the petroleum marketing company, went deeper into the red in the third quarter with its loss position swelling from N1.1 billion at half year to N4.3 billion at the end of the third quarter. This is a reflection of a slowdown in revenue and an accelerated increase in costs, marching the company down into a loss for the second year.

The company’s fortunes dived from a modest after tax profit of N253 million in the third quarter of last year to a huge loss of N3.2 billion for the third quarter of the 2022 financial year.

Ardova’s interim earnings report for the nine months that ended September 2022 shows that the company came under operating pressure in the third quarter from the top to the bottom lines. An increase of N5.8 billion in sales revenue quarter-on-quarter to about N56 billion was more than claimed by an increase of N6.8 billion in cost of sales to N53.8 billion over the period.

With the stronger growth in cost than sales at 14.5 percent compared to 11.5 percent in the quarter, gross profit dropped by 32.5 percent to N2.1 billion.


Further pressure from costs came from distribution expenses that surged up by 88 percent quarter-on-quarter to N1.3 billion ad administrative cost that grew by over 60 percent to N3 billion over the same period.

The cost increases in the quarter created an operating loss of over N2 billion for the third quarter, plunging from an operating profit of N1.5 billion in the same quarter in 2021.

Finance expenses multiplied close to three times quarter-on-quarter to over N1 billion to build a loss of N3.2 billion in the third quarter. This is roughly six times the loss of N541 million the company recorded in the third quarter of last year.


The company’s nine-month position shows a healthy revenue growth margin at 34 percent year-on-year to close at N182.6 billion. Stronger growth in revenue at half year was diluted by the sharp slowdown in the third quarter.

The challenge remains that the cost of sales is growing ahead of sales revenue at 37 percent year-on-year to close at N172.8 billion at the end of September 2022. Cost of sales claimed close to 96 percent of turnover against 92.5 percent in the same period last year.

The incursion resulted in a 4 percent decline in gross profit over the period to N9.7 billion. A big respite came from other income in the form of a windfall from only N195 million in the same period last year to N1.76 billion at the end of the third quarter.

The inflow from other income was however more than countered by major increases in distribution and administrative expenses. Distribution costs jumped a clear 126 percent year-on-year to N4.5 billion and administrative costs grew by over 50 percent to more than N8 billion.


Ardova recorded an operating loss of N1.1 billion for the nine months of trading, down from an operating profit of almost N3 billion in the same period in 2021.

Net finance cost jumped from N832 million to N3.2 billion over the review period to create a net loss of N4.3 billion compared to a net profit of N1.2 billion at the end of the third quarter last year.

The loss has drained the company’s retained earnings from N6.6 billion at the end of December last year to N2.2 billion at the end of the third quarter.

Rising finance expenses reflect balance sheet debts in the region of N60 billion at the end of the third quarter.


Ardova ended last year’s operations with a net loss of N3.8 billion, which has already been exceeded at the end of the third quarter. The final quarter isn’t promising for a turnaround going by last year’s pattern when a final quarter loss consumed the third quarter profit of N1.2 billion and yet created the N3.8 billion loss for the year.


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