Performance: Strong top-line growth

• The Group’s bottom-line increased by 10.6% y/y to GHS 102.2m, posting an EPS of GHS 0.26 in FY2021
• Revenue increased by 55.3% y/y to GHS 7.5b, owing to an increase in fuel prices and higher volume sales
• GOIL’s ex-pump price for the period increased by 27.0% y/y, driven by a 58.7% y/y rise in global crude oil price
• GOIL’s BDC – GOEnergy’s ex-refinery price also increased by 66.5% y/y
• Revenue growth for the period was supported by an 8.6% increase in retail fuel consumption and a 16.3% increase in GoEnergy’s volume of petroleum products distributed
• Despite the strong growth in revenue, gross profit margin dipped by 1.4ppts to 6.3% in FY2021
• Cost of sales increased in line with revenue generation, rising by 57.7% y/y to GHS 7.1b on the back of the increase in global crude oil prices and inflationary pressures
• Opex increased by 34.7% y/y to GHS 334.1m, as other income rose by 23.6% y/y
• Resultantly, operating margin and net profit margin slipped by 0.8ppts and 0.5ppts to 2.2% and 1.4% in FY2021

Outlook: Market share to grow in the coming quarters

• With GoEnergy enabling GOIL to price below its arch competitors, we expect the advantage in pricing to improve the Group’s market share in the coming quarters as consumers shift to OMC’s with relatively lower fuel prices
• We also expect the Group to register positive growth in revenue and earnings on the back of increased consumption and diversification into bitumen production
• With GOIL’s bitumen production, we anticipate the project to help expand margins from exports to neighbouring countries in the sub-region

Valuation: Under Review 

• We are in the process of re-initiating coverage on GOIL and have therefore placed our recommendation under review
• GOIL is trading at a P/E of 7.0x and EV/EBITDA of 5.5x