Board Chairman of the Bulk Oil Storage and Transportation (BOST) Company Limited, Ekow Hackman has described the transformation undergone by BOST over the past three years as truly remarkable.
He made these remarks while speaking at the 2nd Annual General Meeting organised by BOST in Accra.
Speaking at the event, Board Chairman of BOST, Mr. Ekow Hackman said "The transformation that BOST has undergone over the past three years is truly remarkable. The company has been turned from a heavily indebted one to a highly profitable one. In 2022 BOST increased its net profit by 112 percent to GHS 342 million from GHS 161 million in 2021."
"This performance should be viewed in the context of a miserable run of losses which had been recorded for more than a decade until 2021"
He noted that the Board expects the declaration of profits by BOST should become an annual tradition to be celebrated by all and sundry.
"Central to our transformation has been the restoration of our business model, which involves the effective utilization of our strategically located fuel depots connected by a network of pipelines and barges. The revival of these assets has enabled us to deliver fuel products securely and cost-effectively to consumers across the country"
"Through the dedicated efforts of our management and workforce, we have increased significantly the revenue generating assets of the company to 97 percent from a trough of 34 percent in 2017."
He stressed that BOST is committed to ensuring that 100 percent of its assets are generating revenue by the end of 2023.
He explained that the increase in the BOST Margin from 7 pesewas to 9 pesewas in December 2022 provided it with the necessary resources to repair and maintain facilities, many of which are situated in areas where the private sector is absent.
He noted that Business and Economic Environment 2022 was a challenging year for the international and domestic economy, with severe price shocks emanating from Russia’s invasion of Ukraine compounding the lingering effects of the dislocation of supply chains caused by the Covid-19 pandemic.
"As a result, Ghana’s Real GDP growth slowed to 3.3 percent in 2022, down from 5.4 percent in 2021. A “flight to safety”, triggered by the above events, saw a strengthening of the US Dollar and a concomitant weakening of emerging market currencies"
He disclosed that the Cedi depreciated by 54.2 percent against the US Dollar in 2022 compared to a depreciation of 4.1 percent in 2021, with inflation at the end of 2022 recorded at 54.1 percent as compared to 12.6 percent at the end of 2021.
"The downstream oil sector in Ghana experienced a contraction, with consumption of petroleum products falling by 8.7 percent, according to the NPA"
Touching in the Financial and Operational Performance, he said "I am pleased to announce that BOST achieved a net profit after tax of GHS 342,494,604 compared to GHS 160,718,361 in the previous year, an increase of 112 percent"
He hinted that BOST’s operating income also increased by 69 percent from GHS 254,291,419 in 2021 to GHS 428,923,102 in 2022.
"This was on the back of a 77 percent increase in revenue from GHS 1.121 billion in 2021, to GHS 3.019 billion in 2022. Revenue from fuel product sales saw an increase of 387 percent in 2022 compared to 2021. Revenue from gasoline sales increased by 224 percent, from GHS 340,633,871 to GHS 1,103,299,371, whilst gasoil sales increased by 352 percent, from GHS331,063,261 to GHS 1,495,912,905"
He stressed that this positive trading performance could be attributed to improved financing arrangements, more effective customer engagement and retention initiatives as well as the prudent management of trading risks"
Taking his turn, Director-General of SIGA, Ambassador Edward Boateng said "Indeed, GDP growth is estimated to have slowed to 3.2% in 2022, down from 5.4% in 2021. As you are aware, the banking sector vulnerabilities increased due to the cedi depreciation and the impact of the Domestic Debt Exchange Program (DDEP) which was concluded in February 2023.
He noted that despite all these challenges, BOST has demonstrated resilience and commitment to delivering its mandate and ensuring that the shareholder receives value from the investment.
Reflecting on the past year, the Director-General stressed that it was gratifying to note the significant progress made by BOST.
"During the 2021 Annual General Meeting, I was impressed by the remarkable turnaround of the company when BOST reported a profit of GHS160,718,361. After reviewing BOST’s 2022 audited accounts, and noticing the profit of GHS342,494,604 after tax, my confidence in the potential of State-Owned Enterprises was increased"
He lauded the Board, Management and staff for transitioning BOST from negative equity position of GHS248,190,799 in 2021 to a positive position of GHS86,466,542.
"While acknowledging the existing fiscal and infrastructural challenges, we believe that BOST is on the right path for further operational and financial growth. By fostering innovative thinking, perseverance, and teamwork among all stakeholders, we can achieve even more"
On his part, Minister of Energy, Dr. Matthew Opoku Prempeh noted that BOST has transitioned from a negative equity position of (GHS 248,190,799) in 2021 to a positive equity position of GHS 86,466,542 in 2022.
"This positive equity now places BOST on a sound footing to enable the company pay dividends to the government. It is very noteworthy that after making a profit of GHS161 million in 2021, the company has significantly increased its profit to GHS 342 million in 2022, an impressive growth of 112%!
"The progress made by BOST exemplifies the path we should continue to follow, and we encourage you to increase the momentum to sustain this performance and strive for even greater heights."
"BOST’s success contributes to the fiscal policies of the government and supports our national growth and development agenda"
The Energy Minister was hopeful that other State-Owned Enterprises (SOEs) will learn from the BOST story and replicate this performance.
"It is worth noting that the BOST Margin saw an upward revision from 7 to 9 pesewas per litre in 2022, facilitating the commissioning and initiation of major works. These include the Commissioning and operationalization of the Tema-Akosombo-Petroleum Pipeline, Completion of the Kumasi Rehabilitation Project, Repair and commissioning of tanks at Accra Plains Depot (APD), Construction of Bulk Road Vehicles (BRVs) park at Accra Plains Depot, Completion of Tema-Kumasi Pipeline Front End Engineering Design (FEED).
He further noted that these transformations have led to improved operational efficiency and has set the company on a trajectory for growth.
"I am aware that in pursuit of maintaining this positive trajectory, the management of the company has sought a debt-equity swap, which is currently awaiting approval from the Ministry of Finance.
He revealed that government was fully aware of these tactics aimed at derailing the company, and wish to assure that it is are fully behind the noble efforts to consolidate the gains that have been made.
Touching on fuel security, the Energy Minister said "Government is committed to equipping BOST with the necessary resources to fulfil its mandate fully. We are actively considering different modalities for achieving this goal"
Dr. Opoku Prempeh revealed that BOST has been at the centre of the Gold for Oil policy, which seeks to provide fuel to Ghanaians at competitive prices by reducing dependence on forex for import of petroleum products.
"Indeed, BOST has played a major role in the success of this programme. The government is also working towards retooling the Tema Oil Refinery (TOR) to enable it to refine crude oil. We believe that there are significant gains that can be achieved through the collaboration between BOST and TOR. An effectively functioning TOR will complement BOST’s efforts by refining products and delivering them for storage and distribution, thereby alleviating the burden of high prices for Ghanaian petroleum consumers.
He commended the Board of Directors, the Management and staff of BOST for achieving an impressive 113% increase in profit compared to the previous year.
The Minister of Public Enterprises, Joseph Cudjoe said "Today, the story of BOST is very different, and the problems of the past years have been surmounted. Indeed, having recorded its first ever profit in more than a decade of GHS 161 million in 2021, the year 2022 saw an increase of 113% culminating in a net profit of GHS 342 million."
"It is also noteworthy that BOST recorded a positive equity of GHS 86 million; the first positive equity in the last 11 years"
"As Minister for Public Enterprises, BOST’s turnaround is a significant development aligned with our goal of addressing long-standing challenges that have bedeviled State Owned Enterprises and prevented them from fulfilling their full potential.
"We have also introduced the Public Enterprises League Table (PELT), which promotes competition among public enterprises. Ladies and gentlemen, the evidence before me gives me great confidence that BOST will significantly improve on the 8th Position attained in 2021"
Story by: Joshua Kwabena Smith