MRS Oil Deals with N7.3Bn Lawsuits

As of June 30, 2024, MRS Oil is contending with a potential liability of N7.3 billion due to ongoing litigation, according to its second-quarter financial report for 2024. The company estimated that the financial impact of these legal cases is about N453.6 million, with the firm having initiated legal proceedings amounting to N388.7 million. MRS Oil is optimistic that these legal challenges will not result in significant financial burdens.

“The company is involved in several legal disputes currently under consideration in various courts. As of June 30, 2024, the total contingent liabilities from these cases stand at N7.3 billion. The company’s legal team projects that the potential financial impact is around N453.6 million, consistent with the assessment from December 2023.

The lawsuits are actively being contested, and the directors are confident that these disputes will not lead to major financial consequences. Furthermore, the N388.7 million reported for 2023 pertains to the value of legal cases initiated by the company by the end of the reporting period,” the statement elaborated.

For the first half of 2024, MRS Oil reported a foreign exchange loss of N703 million, marking a 71 percent decrease from the N2.43 billion loss recorded in the same period last year.

Revenue for the company increased significantly by 187 percent to N82.81 billion from N28.86 billion in the previous year, driven by a rise in sales volume. The impairment loss on financial assets surged by 66 percent to N1.17 billion in 2024, up from N705.49 million in the first half of the previous year, reflecting higher provisions for doubtful debts.

Operating profit saw a 103 percent improvement, reaching N6.36 billion in the first half of 2024, compared to N3.13 billion in the same period last year.

Profit before tax climbed to N6.49 billion from N3.12 billion, representing a 108 percent increase, while profit after tax rose by 83 percent to N4.21 billion from N2.31 billion in H1 2023. Basic and diluted earnings per share increased to N12.30 from N6.74 in 2023, an 83 percent gain.

On the balance sheet, total assets grew to N65.08 billion as of June 30 from N54.83 billion as of December, a 19 percent rise attributed to higher inventories and trade receivables. Total liabilities also rose to N38.25 billion as of June 30 from N32.22 billion as of December. Additionally, in May, MRS Oil Plc announced its intention to delist from the Nigerian Exchange.