BOST Records GH168.8 million profit, After 11 years of Recording Losses

BOST Records GH168.8 million profit, After 11 years of Recording Losses

The Bulk Oil Storage and Transportation Company Limited (BOST) staged a stunning turnaround after 11 years of recording losses, recording GH168.8 million in profit after tax last year.

This was revealed when Edwin Provencal, the Managing Director of BOST, and Ekow Hackman, the company’s Board Chairman, interacted with Graphic Editor Kobby Asmah and the Graphic Editorial team, during which the company’s turnaround story was shared.

Notably, the state-owned petroleum storage distribution company, which had more than $500 million in debt, was able to get rid of nearly 80% of it.

The company reported a total revenue of GH1.12 billion in the year under review, almost twice as much as the GH632 million recorded in 2020.

GH671.6 million was generated by product sales, GH380.4 million by the BOST Margin, GH52.64 million by storage and rack, GH14.83 million by marine transportation, and GH2.07 million by product swap. The company’s total revenue in the fiscal year under review was GH1.12 billion, nearly double the GH632 million recorded in 2020.

Mr Provencal stated that when he took over BOST in 2019, the company had $624 million in trade liabilities. He stated that, in addition to the debt, the company had obtained bank guarantees and had legacy loans totalling GH284 million.

In addition, BOST owed some bulk oil distribution companies (BDCs) $37 million for products supplied, as well as capital expenditure liabilities of about $109 million. However, he stated that as of the end of last year, the company had paid $611 million of the $624 million debt it owed suppliers.

He explained that the company’s internally generated funds (IGF) accounted for 70% of the payment ($426 million), with the government providing 30% through the Energy Sector Levy Act (ESLA) bond. The company had paid GH187 million of the GH284 million owed to banks through its IGF.

He mentioned that as the company began to repay its debts to the banks, the banks recognised that credibility was being restored, and some of them have decided to extend new credit to the BOST in order to bring in products.

Mr. Provencal revealed that an internal forensic audit conducted by BOST revealed that the $37.6 million owed to BDCs was actually $10.1 million rather than $37.6 million.

He indicated that, in addition to financial challenges, BOST was facing a massive infrastructure challenge, which meant that only 17% of its assets generated revenue.

In addition to repaying majority of its debts, the company has rehabilitated 12 of its 15 storage tanks, revamped its transmission pipelines, and its tugboats and barges, all of which contribute to the company’s revenue streams.

He concluded that BOST’s success had been met with some scepticism from stakeholders who had profited from BOST’s failures. Notwithstanding, the BOST board, management, and staff are unperturbed and would continue to work effectively and efficiently.

Source: Energy Ghana

ENERGY GHANA MAGAZINE

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