MRS Oil faces N7.3bn lawsuits in six months

MRS Oil is grappling with a contingent liability of N7.3bn related to ongoing lawsuits as of June 30, 2024.

This was disclosed in the company’s 2024 second-quarter financial statements.

The oil marketing firm noted that the estimated liability associated with those litigations stood at N453.6m, as it instituted legal actions amounting to N388.7m.

The firm remained confident that the outcomes of those lawsuits would not result in significant financial impacts.

“Certain lawsuits are pending against the company in various courts of law. The total contingent liabilities in respect of pending litigations as of 30 June 2024 are N7.3bn. Per the assessment of the company’s legal team, the estimated liability is about N453.6m (Dec 2023: N453.6m).

“The actions are being contested, and the directors think that no significant liability will arise from these legal cases. Also, the sum of N388.7m in 2023 represents the value of law cases instituted by the company at the end of the reporting period,” the statement partly read.

For the period under review, the company reported a net foreign exchange loss of N703m for the first half of 2024, marking a 71 per cent decrease year-on-year from the N2.43bn FX loss recorded in the same period last year.

The company’s revenue was up 187 per cent to N82.81bn from N28.86bn in the previous year, underpinned by higher sales volumes.

MRS Oil’s impairment loss on financial assets rose by 66 per cent to N1.17bn in 2024 compared to N705.49m in the first half of the previous year, on the back of higher provisions for doubtful debts.

Operating profit improved by 103 per cent, reaching N6.36bn in H1 2024 from N3.13bn.

Profit before taxation for the first half of 2024 increased to N6.49bn from N3.12bn in the same period last year, representing a 108 per cent rise and profit after tax rose by 83 per cent to N4.21bn from N2.31bn in H1 2023.

Basic and diluted earnings per share rose to N12.30 in the first half of the year from N6.74 in 2023, marking an 83 per cent increase.

In terms of the balance sheet, total assets as of June 30 improved to N65.08bn, from N54.83bn as of December last year. This 19 per cent increase was primarily driven by higher inventories and trade receivables and total liabilities increased to N38.25bn as of June 30 from N32.22bn as of December last year.

In May, MRS Oil Plc announced plans to delist from the Nigerian Exchange.