Caverton Offshore Support Group Plc, the parent company of Caverton Helicopters Limited, has recorded a loss of N5.9 billion in its unaudited full year 2021 results, ended December 31 2021, representing a deep nosedive from the N1.1 billion profit recorded in 2020.
The loss comes on the back of a financial crisis rocking the group’s aviation arm, Caverton Helicopters Limited, which has reportedly triggered a mass exodus of staff members, notably pilots.
A deeper look at the figures showed that the company amassed a revenue of N35 billion for the period, up from N32.1 billion recorded in 2020, but this was bugged down by operating expenses which jumped to N27.5 billion from N18.59 billion in 2020.
The latter came on the back of a significant rise in the cost of aircraft insurance premium, aircraft rentals, right to use- Aircraft depreciation, aviation fuel, spare parts and consumables, vessel charter hire, landing and navigational expenses, among others.
Total operating profit equally fell by N1.28 billion from N5.29 billion recorded in the corresponding period of 2020, as net finance cost rose to N4.6 billion from N4 billion, mostly attributable to interest on borrowings.
A statement from the company – which provides of marine, aviation and logistics services to oil and gas companies in Nigeria – announcing the results, however, attributed the plunge in profit to negative impact that the Covid-19 pandemic.
According to it, Covid-19 continues to have negative impact on business operations in Nigeria and the rest of the world.
Covid-19, it said, had caused significant reduction in activities by International and Local Oil and Gas companies who are the major clients of Caverton, which, in turn, rubbed-off on the company’s operations and profitability.
Commenting on the results, Caverton’s Chief Executive Officer, Mr. Bode Makanjuola, noted that the loss was caused by the significant reduction in revenue due to several mitigating factors because of the covid pandemic which resulted in drop in oil production and net foreign exchange loss due to Naira devaluation against the dollar. As a result of this our direct costs increased significantly in 2021.
Commenting further, the CEO stated that, “notwithstanding the loss reported in 2021, Caverton has robust reserves to accommodate this loss and a bulk of the reported loss is a one time charge on our accounts which arose from high start-up costs of our most recent helicopter contract with Chevron.”
According to him, “to further boost revenues, the Group has been exploring further opportunities within and outside the oil and gas sector. In addition to growing our market share in the oil and gas logistics sector, our primary focus for the year will be on third party training and maintenance.
“Our Maintenance Repair and Overhaul (MRO) facility and our Caverton Aviation Training Centre (CATC), both in Lagos, officially commenced business operation in the 2nd half of 2021. Prospects for training and maintenance is extremely positive as we are in advanced contract negotiations with a number of government and private institutions across Sub-Saharan Africa.”
Meanwhile Caverton Helicopters Limited, of the Group’s subsidiaries, is said to be facing hard times as the aviation company is said to be undergoing serious financial troubles.
Caverton Helicopters was in the news for the wrong reasons in 2019 when one its choppers conveying Nigeria’s vice president, Prof Yemi Osinbajo, crashed in Kogi State, but today, the company, a subsidiary of Caverton Offshore Support Group PLC (COSG) – a leading provider of marine, aviation and logistics services to local and international oil and gas companies in Nigeria – has bigger issues of survival to worry about, having been hit by the financial crisis which has prompted a mass exit of staff members including key pilots.
The exit of IOCs may indeed have robbed Caverton of major clients’ base, but there are indications that the company’s challenges go beyond this fact.
According to a report by Westernpost.ng, sources in the know say Caverton has, in the last three months, lost about 20 of its best pilots to an apparently healthier industry rival, OAS Helicopters, which is reported to have won ExxonMobil aviation contract recently.
OAS, offering better salary packages, industry sources say, has been able to poach most of Caverton’s best hands who had hitherto been owed several months of salary areas by the struggling firm whose key challenge many say, is down to poor management. A top aviation source told the platform that the company is run as like family business without due regard to basic rules of corporate governance.
The exit of competent hands have yet caused the company more troubles. There are now perhaps safety issues, which is said to be costing, too, having allegedly prompted Shell Petroleum Development Company, its major client to suspend its multimillion dollars contract until its team is satisfied that the company is back in good financial state, sources said.
(C) THE WITNESS
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