Ghana: TOR Loses GHc186 Million In Four Months

Ghana’s only oil refinery, Tema Oil Refinery, has recorded a net loss of Ghc186.35 million in the first four months of 2019, energynewsafrica.com can report.

According to the 2019 TOR’s Variance Report, the company anticipated its operational loss to be around Ghc71.70 million but ended up recording the huge loss due to a number of factors.

The 14-page report presented an analysis of the financial performance and situation of the Tema Oil Refinery in the West African nation, from January to April 2019.

The report includes commentary on the liquidity situation and an update on the legacy debts and payments being made by ESLA PLC.

The explanatory notes underlying the performance was that the turnover for the period was derived from the sale of petroleum product, fees from storage, loading rack, laboratory services and product transfer fees.

The turnover of the first four months of Ghc126.38 million was lower than the flexed budgeted figure of Ghc170.52 million, representing 26 percent below budget, and this recorded variance was as a result of a reduction in the volume of products stored in the refinery.

On the cost of sales, the Variance Report said Ghc114.12 million was more than the flexed budgeted amount of Ghc91.28 million, representing a negative variance of 25 percent of the budgeted amount.

The higher cost of sales, it said, was due to a surge in international prices and higher exchange rates.

On operating expenses of Ghc198.61 million was more than the budgeted amount of Ghc151.04 million, representing a negative variance of 31 percent of the budgeted amount.

Again, the higher operating expenses could be attributed to the higher exchange difference recorded during the period.

TOR’s four months’ liabilities amounted to Ghc2, 145.64 million with its long-term loan standing at Ghc267.40 million and a deferred tax of Ghc19.08 million.

In spite of government injecting an additional Ghc3, 488.21 million and shareholders’ funds amounting to Gh678.89 million as at the end of the first four months under review, the refinery’s liquidity position is not good.

The report was clear that the company is having serious difficulties meeting operating expenses such as personnel cost, utility bills, insurance premiums, ground rent and land lease payments, as well as statutory payments.

TOR’s total debt, as at April 30, 2019, was Ghc1.5 billion, after ESLA PLC had paid a total amount of Ghc1,135.38 million of legacy debts.