Caverton Offshore Support Group Plc, a company that provides support services in the offshore sector, has reported a significant financial loss of N50.53 billion for the year ending December 31, 2024. This is a worsening situation compared to the previous year, where the company lost N12.89 billion.
In a financial report that was not audited, which the company submitted to the Nigerian Exchange Limited on Thursday, it was revealed that a large part of this loss—N43.49 billion—was due to unfavorable changes in foreign exchange rates. This means that the value of the money Caverton earned in foreign currencies dropped significantly because of the unstable currency market in Nigeria.
Despite this overall loss, Caverton did see some positive news: its revenue increased by 42.7%, rising to N45.64 billion in 2024 from N31.99 billion in 2023. This means that the company was able to sell more of its services and earn more money compared to the previous year. However, the costs of running the business also increased. Operating expenses went up by 28.6%, reaching N31.93 billion from N24.82 billion, and administrative costs rose by 12.4% to N12.07 billion from N10.74 billion. These rising costs put more pressure on the company’s profits.
The major issue for Caverton was the huge loss from foreign exchange, which skyrocketed to N43.49 billion from just N4.65 billion the year before—an increase of 834.7%. This means that the company lost a lot of money due to changes in currency values, which severely impacted its financial situation. Additionally, the costs associated with borrowing money also rose, increasing by 51.3% to N8.81 billion from N5.82 billion in 2023. All of these factors contributed to a dramatic drop in profit before tax, which fell to a loss of N50.53 billion compared to a loss of N12.66 billion the year before.
For shareholders, the news was not good either. The basic earnings per share, which indicates how much profit each share of the company earns, fell to N15.08 from N3.85 in 2023. This means that shareholders are seeing a decline in their returns. The loss attributable to the company’s owners was N50.02 billion, while losses for other stakeholders amounted to N505.3 million.
Caverton’s total assets also took a hit, decreasing by 30.9% to N54.81 billion from N79.32 billion in 2023. This drop was mainly due to a significant decrease in current assets, which fell by 36.3% to N29.90 billion, largely because the company had much less cash on hand—down by 88.9% to N2.27 billion. Non-current assets also fell by 23.5% to N24.31 billion, primarily due to a total loss of rights to use certain assets and a decrease in the value of property and equipment.
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On the other hand, the company’s total liabilities, which are its debts and obligations, increased by 30.5% to N104.50 billion. The amount owed on loans and borrowings rose by 45.6% to N27.21 billion, putting further strain on the company’s cash flow. Additionally, trade and other payables—money owed to suppliers—almost doubled, increasing by 90.7% to N47.35 billion, indicating that the company has more obligations to pay its creditors.
Caverton’s retained earnings, which is the amount of profit that the company has kept rather than paid out to shareholders, fell into negative territory at (N58.91 billion), worsening from (N8.93 billion) in 2023. This resulted in a negative total equity of N49.68 billion, which is a sign of financial distress for the shareholders.
Despite these steep losses, the company reported an improvement in cash flows from its operating activities, which rose to N15.42 billion from a deficit of N3.98 billion in 2023. However, the overall cash and bank balances fell by N18.17 billion to N2.27 billion, raising concerns about the company’s liquidity—its ability to meet short-term obligations.
In response to these results, Caverton’s CEO, Bode Makanjuola, emphasized that the company managed to navigate through tough economic conditions while still maintaining a steady performance. He noted that even with the challenges in Nigeria’s economy, the company achieved a positive operating profit of over N9 billion, showing the strength and adaptability of its business model.
Makanjuola pointed out that Caverton operates in two key sectors where it has a strong position, but these areas are very sensitive to changes in the economy. These ongoing challenges have led to rising operating costs and a decrease in overall value for the company.
He reassured stakeholders that despite the difficulties, Caverton remains focused on improving its operations and looking for strategic opportunities to create value for everyone involved. The CEO expressed confidence in the company’s ability to overcome these challenges and work towards sustainable growth in the future, particularly in its charter flight and marine operations.
In June, it was reported that Caverton had already seen its losses worsen significantly, with the loss after tax increasing by about 146.79% to N12.75 billion at the end of December 2023, compared to N5.17 billion in the same period the year before.
