Caverton Offshore Tanked by 20% after Huge Net Loss
Caverton Offshore Support Group Plc lost 20% of its market value in the stock market due to a strong selling rally by an army of unimpressed investors. The company reported more than N41 billion in net loss between January and September 2024 due to rising cost profiles and FX pressures.
Reflecting a negative trend on the Nigerian Exchange (NGX), the support group share price declined to N2 on Friday from N2.50 at the beginning of the week. The negative price movement plunged its market valuation down to N6.7 billion, spread over its 3.350 billion shares outstanding on NGX.
In its latest earning scorecard, Caverton Support Group posted a huge net loss that wiped off the company’s strength. Between January and September 2024, Caverton Support Group recorded a N41.602 billion loss from a N46.61 million profit in the equivalent period in 2023.
The company’s revenue increased to N34.233 billion in nine months of the financial year 2024, up by 41% from N24.24 billion that was reported in the comparable period.
Reflecting tight operational environment, the company’s operating expenses inched high by 45.71% year on year to N24.813 billion from N17.029 billion.
As the costs profile accelerated fasted than revenue growth, Caverton’s margin toned down. Net exchange rate difference of N35.705 billion eclipsed the company’s earnings performance, reversing about N786 million FX gain in the comparable period.
A strong spike in net finance costs damaged the group earnings amidst other related market and business rivalry pressures. In 12 months, Caverton net finance costs climbed to N6.658 billion, up by 379% from N1.390 billion in the comparable period in 2023.
Commenting on the results, Caverton’s Chief Executive Officer, Mr. Bode Makanjuola, said Nigeria’s operating environment, particularly in marine and aviation sectors, continues to face substantial macroeconomic headwinds.
“The removal of subsidies has led to increased energy costs, currency devaluation, elevated inflation and lending rates, all of which have impacted our overall performance. Makanjuola said.
“We have continued to diversify our revenue streams, harnessing its maritime expertise, Caverton Marine has extended its capabilities into boat building, strengthened our Maintenance, Repair, and Overhaul facility, all of which is aimed at adapting the business to the evolving landscape.
“This is enhancing our business resilience, all while maintaining excellent safety and service quality for our clients.” Acknowledging the challenges faced in this reporting period, Caverton remains focused on optimizing operations, enhancing cost management strategies, and exploring new growth opportunities.
“Our resilience and commitment to adapting to market conditions give us confidence in creating sustainable, long-term value for our shareholders,” Makanjuola affirmed. #Caverton Offshore Tanked by 20% after Huge Net Loss Naira Falls to N1,486 as FX Crisis Deepens
