$73M TO NPF - Solomon Star News


26 March 2018

SPOL pays record dividend


NATIONAL Provident Fund (NPF) on Friday received $73 million in dividend from one of its investment portfolios, South Pacific Oil Limited (SPOL).

This was an increase of $12 million from the $61 million dividend SPOL paid to NPF in the last financial year.

NPF board chairman Peter Boyers was ecstatic when he received the payment on Friday.

“I am honoured to receive this dividend of $73 million on behalf of the NPF board, management, staff and members of the fund,’’ Mr Boyers said.

 “Today’s payout shows an increase of $12 million from the 2017 financial period,” he added.

“This is the highest ever dividend so far that has been declared and paid in cash by SPOL in its last 11 years of operation to its shareholders.”

Mr Boyers also thanked the management and staff of SPOL for their commitment and an excellent result.

He said SPOL is now 100% owned by SINPF and is one of the biggest and is the best performing equity investment of the fund, averaging an annual rate of return of 35% per year over the past 11 years period.

“As a result of the impressive financial performance over the past 10 years, from an initial at coast investment of $42.1 million in 2006, the value of our shares in SPOL has now reached more than $840 million.  

“We are proud of this investment in SPO as the company continues to grow its market share and presence in the outer provinces in line with its slogan ‘fueling our islands’.

SPOL board chairman Gideon Zoleveke Jr said 2017 has been a good year for the company in terms of profitability and volume growth.

“The company has recorded a net profit before tax of $132.9 million for the year ended 31st December 2017,’’ Mr Zoleveke said.

The chairman said in 2016 the SPO recorded a net profit before tax of $116.1 million.

“Therefore this result represents an increase of $16.8 million, and this represents growth of net profit before tax of 14.5%,’’ he added.

Mr Zoloveke attributed the growth to the following factors:

  • In terms of volume, the company sold over 105.8 million litres, an increase of 20% of the 2016 volume. When one considers the economic climate of the country in 2017, this result is outstanding.

  • Continuous drive in operating costs, resulting in the operating expenses of $50.8 million compared to $55.8 million in 2016.

  • In terms of Finance income, the company recorded $3.4 million for 2017 in interest rates and exchange rate gains.

  • Few incidents or accidents in spite of increase in volumes handled and the shift hours worked reflects good health, safety, Security and environment programs and Oil Spill capability.

The image of the company improved as good Corporate Citizens through the “We Care” program that saw the staff engaging in community activities such as the painting, cleaning and contributing equipment to the Mataniko Pikinini Clinic, continuous engagement with San Isidoro Handicapped People’s School and Tenaru Christian Care Centre, St John Ambulance as well as sponsoring Rugby.

Despite the successes, Mr Zoleveke said the company also encountered challenges in 2017.

“The crude oil price continued to fluctuate globally, which affected the local prices.

“The means of plats average around USD65.50/barrel, compared to USD52.80/barrel in 2016.

“This is an increase of around USD$13/barrel,’’ he added.

Mr Zoloveke also stated that the Price Advisory committee decreased the margins by $0.40 per litre that impacted on the margins.

“The effects of this were felt towards the end of 2017.

“This has prompted SPO to make adjustment to their costs and margins so that their profit projection remains intact.”

Mr Zoleveke also insisted the competition from third parties remain a challenge for SPO.

“As a company we welcome competition, but we request the government to create a level playing field,’’ he added.