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  • Japaul set to unlock $1.6b gold bank amid recapitalisation

    Japaul set to unlock $1.6b gold bank amid recapitalisation

    • Raises N20b new capital

    Japaul Gold & Ventures Plc is entering a new phase of aggressive growth that will see the mining company unlocking its vast existing gold fields estimated at more than $1.55 billion.

    Japaul on Monday completed a successful recapitalisation of N20 billion with the listing of the additional shares from the private placement at the Nigerian Exchange (NGX).

    A total of 8.0 billion ordinary shares of 50 Kobo each was added to outstanding shares in the name of Japaul at the NGX at N2.50 per share. The listing of the additional shares from the private placement increased Japaul’s total issued and fully paid up shares to 14.26 billion ordinary shares of 50 Kobo each.

    Speaking on the growth plan of the company, Chairman, Japaul Gold & Mining Ventures Plc, Mr. Paul Jegede, said the company has many exploration licenses in different parts of the country and mining leases in different gold fields.

    According to him, the company is now being reorganised structurally by KPMG with the objective of becoming a world class gold mining company, not only in Nigeria but across the globe.

    “Presently, Japaul has 637,000 inferred reserve ounces of gold, which worth $1.551 billion on its mining leases that it has acquired.  To this end, the company has been able to come up with the means of financing further exploration and to commence the preliminary development of the gold field, with the already made clear plan to commence gold production before the end of 2025,” Jegede said.

    He said the company has been able to come out of its troubled past as there is light now at the end of the tunnel for the company that looked as if it was going to go out of business, coming from a huge operating losses of N2.859 billion in 2021 to an operating profit of N191 million in 2022.

    He pointed out that the group’s profit improved further to N619 million in 2023, but it was hit by an exchange loss of about N1.2 billion, which brought the operating profit to negative.

    “With all indications, the loss is going to be wiped out this year 2024”, Jegede said, noting that the commencement of gold production would further accentuate growth.

    “With the recent development in our company, we are positioned for continuous growth of our revenue and profitability. There shall be ceaseless payment of dividends in a very short time from now, and tremendous value shall be added to the assets of the investors to the company.

     “Japaul has always been a trailblazer in the line of their businesses.  It was the only company in the maritime sector at the stock exchange before the diversification of its business to mining of gold, and it is now blazing the trails in finding strategic means of financing the mining of gold, which happen to be an area of business that many financial institutions in Nigeria are yet to understand,” Jegede said.

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    He added that with the future of crude oil business facing the challenge of global warming issues, Japaul has been able to be proactive, hence its smart diversification into mining to add value to the wealth of its shareholders with dividend payment and possible bonus shares in the nearest future.

    Group Managing Director, Japaul Gold & Ventures Plc, Mr. Akin Oladapo, said the transition into the mining sector was aimed at establishing a niche for the company across the value chain of the global mining business.

    He pointed out that expatriates have been engaged by Japaul to manage the mining operations to meeting international standard, noting that the success of the special placement is a welcome development that calls for celebration.

    He noted that as a result of the strategic shift, the company changed its name from Japaul Oil & Maritime Services Plc to Japaul Gold & Ventures Plc in 2020, facing a new future of remarkable growth.

     “Nigeria is so blessed with more than 44 different minerals including gold in different parts of the country, and Japaul has been strategically positioned to start the business of mining gold and other minerals with the vision of having both gold produced and gold reserve in excess of 100 million ounces between now and year 2034,” Oladapo said.

    Japaul was incorporated in 1994 but started its business in 1997 as a private company. Initially, it operated as an oil servicing company, supporting international oil companies by providing offshore logistic services such as chartering of sea going vessels, barges and accommodation barges. The company also engaged in limited quarry operations in the mining business since 2005 till date.

    Due to low patronage of international oil companies (IOCs) generally to oil servicing companies, which also included Japaul, a strategic decision was made by Japaul in 2020 to diversify into mining of gold and other solid minerals, having identified the great potentials in the mining industry in Nigeria.

  • Japaul hits low as auditors raise concerns over future survival

    Japaul Oil & Maritime Services Plc hits a new low of 24 kobo per share at the weekend as investors review the risk-return prospects of the company after external auditors raised the red flag on the viability of the going concern status of the company.

    Japaul’s share price declined by 20 per cent to close weekend at 24 kobo, its lowest price ever.

    In the latest audit, external auditors to Japaul, PKF Professional Services, drew attention to the losing streak at the company and the resultant build up of deficits over the years.

    The external auditors noted that the Japaul Group has “been making persistent losses over the years and at 31 December 2017, the Group made a loss from continuing operation of N13.13 billion, while the company made a loss of N10.64 billion, and working capital deficiency of N8.8 billion” by the end of 2017 as against N7.5 billion in 2016.

    “The Group shareholders’ fund had been eroded to the tune of N27.62 billion, while the company shareholders’ fund was eroded to N25.27billion. The company suffered substantial losses from its operations in the year from curtailed activities, which had raised doubt about its ability to continue as a going concern,” the auditors pointed out.

    Directors of the marine services group however said improved activities in the current year and a capital injection programme are expected to keep the company going.

    According to the directors, one of the group’s vessels is returning to NLNG for continuation of existing contract early in the second quarter of 2018 while another vessel has been engaged by NNPC for a three -year contract effective March 2018.

    The board added that 300-man accommodation barge is being fixed for engagement with ExxonMobil through Checkmate Oil & Gas Ltd in a contract that is expected to commence by this quarter while the group looks to is secure a 15-year contract vessel chartering with NLNG by building a new vessel through a shipyard in South Africa.

    Other measures expected by the directors to improve the performance of the group include securing major shoreline protection dredging contracts and reclamation works presently at commercial stage, sustaining and growing recent efforts in retails and mining operations at various sites across the country, sustaining and expanding existing quarrying business and diversification into mechanized mining of solid minerals.

    “Upon due consideration of the uncertainties described above, the Directors have a reasonable expectation that the Group have adequate resources to continue in operation for the foreseeable future,” the board stated.

    Japaul recently confirmed that it has entered into a binding commitment with Milost Global Inc for injection of $350 million or N10.7 billion into its operations. Milost Global Inc is an American private equity firm.

    In a regulatory filing at the Nigerian Stock Exchange (NSE) signed by the Japaul Acting Managing Group Director, Mr. Akin Oladapo, Japaul stated that the $350 million new capital would be split into $250 million new equity injection and $100 million convertible notes. Convertible notes can also be converted to equities, subject to the terms of the issuance.

    Japaul noted that the new capital will help to reduce its precarious financial position.

    “Japaul therefore seeks the understanding and cooperation of its stakeholders, as it will soon commence the transaction by going through all the laid down rules and regulations of Securities & Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE), because the commitment is still subject to regulatory approvals,” Japaul stated.

    The enthusiasm that had built up and leapfrogged Japaul’s share price by more than 170 per cent appeared to have subsided as investors wait for the filing of the transaction documents for the $350 million capital injection. A similar proposed capital injection by Milost Global in Unity Bank had ended on a controversial note, with the bank denying any formal acceptance of a capital injection from the American private equity firm.

  • How we ended with N22.5b loss, by Japaul

    The management of Japaul Oil and Maritime Services (JOMS) Plc has said the company’s performance was worsened by the challenging operating environment in 2016 and exacerbated further by the impact of the devaluation of Naira by the Central Bank of Nigeria (CBN).

    Key extracts of the audited report and accounts of Japaul for the year ended December 31, 2016 showed that turnover dropped from N8.15 billion in 2015 to N3.08 billion. Administrative expenses, however, jumped from N6.36 billion in 2015 to N21.38 billion in 2016. With this, operating loss ballooned from N4.04 billion in 2015 to N19.23 billion in 2016. Loss before tax rose from N7.90 billion to N21.34 billion while loss after tax tripled from N8.04 billion to N22.01 billion.

    The management of the company said the devaluation led to foreign exchange losses on the company’s dollar denominated liabilities and bank loans.

    According to the company, naira devaluation against the US dollar from the CBN, closing rate of N196.50:$1.00 in 2015  to N304.5.00:$1.00 in 2016, effectively resulted in significant foreign exchange losses accounting for over 70 per cent of the group’s loss.

    The company also noted that weak economic fundamentals and its pass-through effect on the oil and gas sector with similar impact on the maritime industry further hampered top-line growth, leading to poor revenue generation for the company.

    “The poor performance notwithstanding, the company reaffirmed that with improved business environment in 2017, the current restructuring efforts within the group, evidenced by the recent sale of its foreign subsidiary and the continued support of shareholders, the fortunes of the company will be transformed,” the management said in an explanatory statement to the results.

    The management of the company assured that the current repositioning initiatives would continue in order to achieve improvements in the underlying asset quality, cost efficiency and enhanced revenue generation across the group.

     

  • Court adjourns winding-up suit against Japaul Energy

    The Federal High Court has adjourned a suit by a company, AYM Shafa Limited, against Japaul Energy Limited over its alleged failure to repay a N153million debt.

    AYM Shafa, in a petition, is praying that Japaul Energy be wound up for being insolvent and unable to pay its debts.

    The petitioner said it paid Japaul Energy N153,200,000 for the supply of two million litres of Premium Motor Spirit (petrol), to be delivered between last October 5 to 12.

    AYM Shafa said Japaul Energy claimed that the product was already on ground in a tank farm in Calabar, adding that the contract was entered on the assumption that the product was available for supply.

    The petitioner, through its lawyer Chris Ekemezie, said Japaul Energy failed to supply the product despite repeated demands. It said said when it got to the tank farm, it discovered that Japaul Energy had no PMS stored.

    AYM Shafa said after two months of the respondent’s failure to supply the product, it demanded a refund of the money; Japaul Energy, it said, promised to “process” and make the refund.

    “Despite this undertaking to refund the money and several other oral and written entreaties, three months after, Japaul Energy still has refused, failed and/or neglected to do so, thereby putting the petitioner in a financial quagmire,” AYM Shafa said.

    The petitioner said it learnt that Japaul Energy never had the product on ground to supply, contrary to its “misrepresentation”.

    AYM Shafa’s Depot Supervisor Isyaku Yahaya, in a counter-affidavit, said: “I know that the applicant is indebted to a lot of companies as well and not just to the petitioner. The only reason it has failed to pay back the money is because it is insolvent and incapable of paying its debts.”

    He added that the expected date of delivery, which was April 24, had long passed with Japaul Energy still unable to commence the product’s delivery. The petitioner accused the respondent of frustrating all attempts to resolve the dispute

    But, Japaul Energy said it is “very solvent given her various on-going transactions with customers across Nigeria.”

    It said the money in its bank accounts “are far more than the amount of money involved in the contract…”

    The company said there was only a delay in supplying product and it was not a case of inability to pay debt.

    “Due to the prevailing conditions of petroleum products scarcity as is well known in the public domain, the respondent/objector could not meet up with the supply of the product within the time agreed by parties,” Japaul Energy said.

    Justice Ibrahim Buba adjourned till June 8 for settlement or definite hearing should Japaul Energy fail to pay the debt.

  • Japaul’s profit drops by 71% in first half

    Japaul’s profit drops by 71% in first half

    Japaul Oil & Maritime Services Plc witnessed a major contraction in profitability in the first half as the upstream maritime services company struggled with sluggish sales.

    Interim report and accounts of Japaul for the six-month period ended June 30, 2013 showed that profits before and after tax dropped by 72 per cent and 67 per cent respectively on the back of 12.1 per cent increase in sales.

    Profit before tax closed June 2013 at N420.36 million as against N1.50 billion recorded in comparable period of 2012. With no tax provision for 2013, net profit remained at N420.36 million as against N1.27 billion recorded in corresponding period of 2012.

    Total turnover rose by 12.07 per cent from N6.05 billion to N6.78 billion. Gross profit however slipped by 8.6 per cent from N3.72 billion in 2012 to N3.40 billion in 2013.

    The first half performance showed a continuation of the downtrend that had characterized the performance of the company in recent period. Audited report and accounts of Japaul for the year ended December 31, 2012 showed that turnover increased from N10.25 billion in 2011 to N12.28 billion in 2012. Gross profit rose from N4.72 billion to N4.999 billion. Profit before tax however dropped from N1.45 billion to N532.71 million.

    Profit after tax declined from N980.44 million to N283.73 million. Earnings per share dropped from 15.66 kobo to 4.53 kobo. With these, the company’s shareholders’ funds dropped from N22.56 billion to N17.08 billion.

    Chairman, Japaul Oil & Maritime Services Plc, Major-General Omosebi (rtd), had explained that adjustments for depreciation and newly introduced policies for preparations of statutory financial reports were responsible for the drastic decline in the profit of the company in 2012.

    According to him, while the turnover had increased and raised hopes of improved bottom-line last year, the company’s net profit was adversely affected by higher-than-expected depreciation and financing expenses.

    He said the companies acquired some new vessels towards the end of the year and decided to charge depreciation on them in order to readjust the company’s depreciation to a more ideal position, a situation that increased depreciation on profit to about N2.1 billion, N1.56 billion above the rate for previous year.

    “Some of the new vessels that we bought are financed with loans from the bank, hence the high amount of interest that we paid during the year. Moreover, the bad debt that was written off against our profit for the year is N600 million because one of our major debtors, NAFTOGAS, got liquidated. Though we believe that we will get some money back from the appointed liquidator, we decided to write off the amount right now,” Omosebi said.

    He noted that the need to comply with the requirements of the International Financial Reporting Standard (IFRS) necessitated several adjustments in the accounts of the company, which were written off against the company’s profits and reserves and eventually threw the reserves to negative from N2.9 billion.

    He however reassured shareholders on the prospects of the company noting that it has garnered huge demand and contracts that would propel its growth in the years ahead.

    He said the company plans to acquire six more vessels between now and next year with combined income earning capability of $150,000 per day, which would boost the existing income stream.

    “The operating environment is so good that if we have 50 vessels today, the market will absorb them because the Nigeria Local Content Policy has created an enabling environment for all local maritime companies to do well. It is evident therefore that there is no limit to our growth despite all the challenges we have been facing,” Omosebi said.

  • Why we made lower profit, by Japaul

    Chairman, Japaul Oil & Maritime Services Plc, Major General Omosebi (rtd), has explained that adjustments for depreciation and newly introduced policies for preparations of statutory financial reports were responsible for the drastic decline in the profit of the company in 2012.

    According to him, while the turnover had increased and raised hopes of improved bottom-line in 2012, the company’s net profit was adversely affected by higher-than-expected depreciation and financing expenses.

    He said the companies acquired some new vessels towards the end of the year and decided to charge depreciation on them in order to readjust the company’s depreciation to a more ideal position, a situation that increased depreciation on profit to about N2.1 billion, N1.56 billion above the rate for previous year.

    “Some of the new vessels that we bought are financed with loans from the bank, hence the high amount of interest that we paid during the year. Moreover, the bad debt that was written off against our profit for the year is N600 million because one of our major debtors, NAFTOGAS, got liquidated. Though we believe that we will get some money back from the appointed liquidator, we decided to write off the amount right now,” Omosebi said.

    He noted that the need to comply with the requirements of the International Financial Reporting Standard (IFRS) necessitated several adjustments in the accounts of the company, which were written off against the company’s profits and reserves and eventually threw the reserves to negative from N2.9 billion.

    He, however, reassured shareholders on the prospects of the company noting that it has garnered huge demand and contracts that would propel its growth in the years ahead.

    He said the company plans to acquire six more vessels between now and 2014 with combined income earning capability of $150,000 per day, which would boost the existing income stream.

    “The operating environment is so good that if we have 50 vessels today, the market will absorb them because the Nigeria Local Content Policy has created an enabling environment for all local maritime companies to do well. It is evident therefore that there is no limit to our growth despite all the challenges we have been facing,” Omosebi said.

    Audited report and accounts of Japaul for the year ended December 31, 2012 showed that turnover increased from N10.25 billion in 2011 to N12.28 billion in 2012. Gross profit rose from N4.72 billion to N4.999 billion. Profit before tax however dropped from N1.45 billion to N532.71 million. Profit after tax declined from N980.44 million to N283.73 million. Earnings per share dropped from 15.66 kobo to 4.53 kobo. With these, the company’s shareholders’ funds dropped from N22.56 billion to N17.08 billion.