Africa’s fourth richest billionaire Mike Adenuga will pocket $1.88 million (N774.4 million) in dividends from his stake in the Nigerian petroleum marketing company, Conoil.
In 2020, a global oil glut and weakened demand for refined crude oil products caused by the COVID-19 pandemic led to a crash in the crude oil price to below $20 per barrel.
With demand down, weak fundamentals in the international oil market severely impacted the operation of companies such as Conoil that operate in Nigeria.
The company’s earnings during the year were impacted by the unprecedented disruption. Conoil’s revenue that year plunged by 15.9 percent to $285 million (N117.47 billion) compared with $339 million (N139.75 billion) in 2019.
Conoil has been a leading petroleum marketer in Nigeria since the proliferation of cars in the 1920s.
The company saw its profit decline by 27 percent to $3.5 million (N1.44 billion) in 2020, compared with $4.8 million (N1.97 billion) the previous year.
The 27-percent reduction in profit made the board of directors of Conoil recommend a dividend payout of about $2.5 million (N1.04 billion).
This translates to a dividend of $0.0036 (N1.50) per share, which is 25-percent lower than the 2019 dividend of $0.0049 (N2.00) per share.
Adenuga, the founder of Globacom, the country’s third-largest telecom operator, is the majority shareholder of the oil marketing company with an equity stake amounting to 74.4 percent of the company’s total issued shares.
With his stake amounting to 516,298,603 units, the telecom mogul is expected to earn a dividend of about $1.88 million (N774.4 million) from his equity position in Conoil.
This is lower than the dividend of $2.7 million (N1.03 billion) that he earned from his stake last year.
What you should know
Adenuga is Africa’s fourth richest billionaire and chairman of Conoil.
He built the majority of his fortune from telecom and oil production and has a real time net worth of about $6.4 billion (N2.64 trillion) as of June 13, according to Forbes.
Since its incorporation in 1927, Conoil has grown into a leading player in the Nigerian oil and gas industry.
As of the close of the Nigerian Stock Exchange on June 11, shares in Conoil traded for $0.50 (N20.50) per share. With the company’s shares at $0.50 (N20.50) per share, Conoil’s market capitalization is about $34.5 million (N14.2 billion) on the local bourse.