BOST records profit for third consecutive year

The Bulk Oil Storage and Transportation (BOST) continued its consistent financial growth trajectory over the last three years, recording a cumulative profit of GH₵710 million over the period.

At its Annual General Meeting on Friday, July 19, 2024, the company announced that it posted a profit of GH₵208 million in the 2023 financial year, compared to GH₵342 million in 2022 and GH₵160 million in 2021.

The company also announced that its equity position strengthened from a negative GH₵248 million in 2021 to a positive GH₵277 million in the year under review, thus providing a strong foundation for future growth.

Explaining the easing of the company's profit for the 2023 financial year compared to 2022, the Chairman of BOST, Ekow Hackman, said at the Annual General Meeting, “It is important to highlight the unique role of BOST in the Government’s GOLD FOR OIL (G4O) Programme. G4O, introduced under the administration of the Bank of Ghana, was aimed at mitigating the impact of foreign exchange fluctuations and rising inflation. Its operation in 2023 resulted in a reduction in the price of a litre of diesel from over GH₵23 to an average of GH₵14.

"The reduction in profitability of the company compared to 2022 should therefore be seen in the context of the government’s deliberate policy to cushion the Ghanaian consumer from the adverse effects of imported inflation.”

Mr. Hackman said the phenomenon could not have been achieved if BOST were a purely privately owned entity, adding that the management of the company is to be commended for playing this vital role in assisting in the implementation of this strategic government policy whilst at the same time meeting the operational and investment obligations of the company.

For instance, he explained that the volumes of fuel products traded by BOST increased by 235 percent from 318.3 million litres in 2022 to 1.1 billion litres in 2023.

“Under the G4O programme, BOST received a fee for trading the requisite volumes of products from the Bank of Ghana with revenue recognition as well as expenditure passing to the Bank of Ghana. This was unlike the company’s usual trading activity where revenues and costs of the fuel trade are recognised in the company’s books. Nevertheless, the increase in turnover represented by the G4O trade was of a magnitude of 237 percent from GHS 3.02 billion, which was achieved in 2022, to GH₵10.17 billion in 2023,” he explained.

Mr. Hackman said the company’s market share increased to 29 percent in 2023 from eight percent in 2022. The value of fixed assets also increased from GH₵1.478 billion in 2022 to GH₵1.620 billion in 2023.

Looking ahead, Mr. Hackman pledged the commitment of the company to continue investing in the human capacity of the company to foster a culture of continuous development and learning, the adoption of new technology, including Artificial Intelligence (A.I.), to enhance efficiency and productivity.

The diversification of energy products will be key to managing the Energy Transition, which is required to achieve net zero carbon emissions. The company’s next Strategic Plan should be centered around these broad policies.

Dividend

The Minister of Public Enterprises, Joseph Cudjoe, expressed the hope that the management of BOST will continue on this path to eventually pay dividends to the government, in line with the vision of President Nana Addo Dankwa Akufo-Addo. He also acknowledged the significant role the company has played in implementing the Gold for Oil programme.

To him, “this policy addresses the pressures on the exchange rate, rising petroleum prices, and inflation, which lead to increased prices of goods and services in the country.”

Achievement

Hebert Krapa, the Minister of State at the Energy Ministry, said, “This remarkable feat, which has eluded the company since its inception, now positions BOST on the path to pay dividends to the government of Ghana in the immediate future. It is worth noting the significant impact of BOST on petroleum product prices and inflation in the country, particularly through its leadership in the implementation of the Gold for Oil Program spearheaded by the Vice President, Alhaji Dr. Mahamudu Bawumia.”

The minister did not mince words when he said, “This policy addresses exchange rate pressures, rising petroleum prices, and inflation, and its impact has been evident in ensuring stable petroleum prices in the country. Indeed, the programme has brought relief to Ghanaians and encouraged competitive pricing of imported petroleum products.”

Room for improvement

The Director-General of the State Interest and Governance Authority (SIGA), John Boadu, acknowledged the fiscal and infrastructural challenges and noted that “we firmly believe there is room to improve financial performance and drive further growth. With innovative thinking, perseverance, and teamwork from all stakeholders, even more can be achieved. We at SIGA have always maintained that when the interest of the Board of Directors aligns with the government’s interest and management interest is aligned with the board’s interest, then we are sure that we are going to see the kind of success story that we are witnessing in BOST.”

Looking forward

Managing Director of BOST, Edwin Provencal, mentioned the company’s strategic plan, saying, “I am excited to see our strategy yielding the required gains for the shareholder and the Ghanaian taxpayer. I believe that the company has a very bright future. With our strategy, we are ready to embrace the great opportunities that lie ahead, and we are committed to continuing to deliver value for all our stakeholders.”