The Year 2014 began as a promising year also when we looked forward to our financial growth and development. We projected increase in the areas of Storage & Handling including the resumption of Heavy Fuel Oil (HFO) importation, Fees, and Rental Income. We also projected reduction in losses of Ship-to-Shore and Demurrage operations.
Then came the EBOLA Pandemic that took the lives of over 4000 Liberians and foreign residents within our borders. This necessitated the State of Emergency announced by the President of Liberia, Madam Ellen Johnson Sirleaf that was aimed at curbing the spread of the Ebola virus The Board of Directors of LPRC on July 28, 2014 mandated that LPRC took immediate actions in defeating the spread of the Ebola virus.
Those actions taken in curbing the Ebola virus especially at LPRC necessitated the reduction of non essential staff, and the strict measures and heightened security of the Terminal. There were also a reduction in Importation of petroleum products due to Shipping Industry fear for the spread of the deadly Ebola virus to its staff and the outside world.
2014 Financial Highlights
LPRC’s profitability is dependent upon the level of economic activities in the country due to the strategic nature of petroleum products. We experienced a $22.0 million revenue generation in 2013 which was a 2.33% increase over 2012 actual of $21.5 million. This minimum increase was due to lack of storage capacity caused by construction work. Several tanks were placed out of service for renewal and rehabilitation. We expected this number to have increased by the end of 2014. Notwithstanding, 2014, revenue grew modestly by 0.91% to US $ 22.2 million. Even though expected market demand in the general economy shows 1% growth, the expected growth will not impact the petroleum market due to the emergence of new product (HFO) into the Oil Sector and the commissioning of two newly constructed Tanks, which will ultimately increase LPRC’s tanks capacity by six million gallons. Thus Revenue (Net of Losses) would increase by US $ 2.0 Million from US $ 22.2 Million in 2014, to US $ 24.2 Million in 2015/2016 or by 9%.
2. A total Dividend of 4.0 million was paid GOL for budget support in 2014. Total income tax payment to GOL for corporate taxes in 2014 amounted to US $ 1.8 million.
3. There were few changes in the price of crude oil on the world market. This caused movement in the pricing of refined products locally. We experienced an increase in prices the first couple of months of the year which trended down in the second quarter and half of the year when prices began to decrease for both gasoline and diesel fuel. LPRC, being a member of the African Refiners Association (ARA), adhered to all decisions affecting the Oil and Gas Industry and complied with price reduction accordingly.
In 2014, prices of crude oil continued to decline on the world market which continued to affect prices globally. However, LPRC imported 360,643 metric tons during the same year, which was 15% over 2013 mixed products imported. Heavy Fuel Oil (HFO) was also a new addition to LPRC’s mixed products storage that contributed to increased revenue as well.
LPRC Profitability is dependent upon the importation of petroleum products in the country. The Department responsible to take care of the fiscal affairs of LPRC is the fiscal or Finance Department, headed by its comptroller, Madam Elizabeth M. Tubman. The Finance Department is comprised of three sections. Namely: General Accounting, Budgeting and Marketing. These formed the fiscal arms of LPRC.
INCOME and EXPENSES
During the period under review, the corporation earned total revenue of US $ 22.2 M, which was US$ 1.0 M or 5% over 2013 total revenue of USS 22.1 M. LPRC Operating Expenses amounted to US$ 13.4 M. This means 2014 Operating Expenses increased by US$ 1.0 M or 8% over 2013 Operating Expenses of US$ 12.4 M. LPRC Net Income in 2014, however, dropped by US$ 0.8 M. Or by 12% from US$ 6.7 M in 2013 to US$ 5.9 M. in 2014.
TOTAL ASSET S & LIABILITIES
The Company Total Liabilities decrease from 3.2 million in 2013 to 2.7 million, a 15% decrease in 2014. This was contributed by the following:
- Account Payable Trade decreased by 14.8%, this represents total unpaid amounts to vendors for 2014,
- Payroll Liabilities increased by 52.6 %,
- Corporate Income Tax Payable decreased by 0.1%, represents unpaid portion for both sales tax of 2% and income tax of 25% for 2014,
- Deferred/Unearned Income decreased by 67.5%, unearned amounts based on deferred Revenue schedule.
Revenue Growth (2010– 2014)
Cash balances in the financial year decreased by 11% from US$ 6.7 million in 2013 to US$ 5.9 million in 2014 due to:
- Net Cash Provided By Operating Activities – US$ 7.4 million in 2013 to US$ 5.8 million in 2014,
- Net Cash (Used) By Investing Activities – US$ (5.8 million) in 2013 to US$ (1.9 million) in 2014,
- Net Cash (Used) By Financing Activities – US$ (2.8 million) in 2013 to US$ (3.3 million) in 2014,
- Company’s cash balance as of December 31, 2013 was 9.7 million US$ 8.9 million in December 31, 2014.