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The Bulk Oil Storage and Trans...

The Bulk Oil Storage and Transportation (BOST) Limited Company has held its maiden Annual General Meeting since its establishment in 1993.
The event, which took place at the Movenpick Ambassador Hotel in Accra on Wednesday, September 14, 2022, had many dignitaries gracing it with their presence.
The AGM also comes as a great achievement to the company, as it signifies a financial breakthrough from several years of indebtedness.

The Energy Minister, Dr. Matthew Opoku Prempeh, who in his capacity as the sector minister is the authorized representative of the shareholder of BOST, applauded the company’s achievements over the years.
“I have had the opportunity to take a look at the state of the company in January 2017 from a copious report I received and was surprised at the financial and operational out-turns of the company for the year 2021 which report I believe shall be a cardinal part of this Annual General Meeting.”
He continued, “From a debt position of US$624 million owed suppliers and related parties, BOST has over the five years preceding the year in focus, 2021, paid US$611 million with IGF contributing about US$423 million. The BOST portion translates into an average of US$84.6 million of company generated cash per year being spent on debts accrued through the trading activities of the company in the past.”
He further congratulated the Board of Directors and management of the company for the financial performance in the year ended 2021.
“I am confident more can be achieved if the same momentum is sustained. A profit before tax of GH¢164 million from a previous year of GH¢2 million,” he added.
The Minister for Public Enterprises, Joseph Cudjoe, tasked the Board of Directors of BOST to work harder towards making the company a dividend-paying enterprise following this first AGM.
“BOST in 2021 made a turnaround from a heavy loss position of GH¢458.64 million in 2016 through a minimal loss of GH¢291.02 million in 2020 to a profit position of over GH¢160 million in 2021. I have learnt that this feat is the first in 11 years and I seize this opportunity to commend the current Board and Management for striving to attain this success. It is my fervent hope that Management will continue to tread this path to the extent of paying dividends to government, in accordance with the vision of the President.”
BOST achieved a net profit after income tax of GH¢160,718,361 for the financial year 2021 after all provisions. This compares to a loss of GH¢291,017,758 in 2020 which contained a provision of GH¢292,935,973 for deferred taxation, resulting from the revaluation of the company’s assets in that year.
Of greater significance is the increase in operational profit from GH¢1,918,215 in 2020 to GH¢163,871,810 in 2021.

BOST saw a significant improvement in its core business in 2021 with an overall increase in gasoline and gasoil sales revenue of 83%. Revenue from gasoline sales increased by 144% from GH¢140 million to GH¢341 million with diesel sales also increasing by 46% from GH¢227 million to GH¢331 million.
Revenue from our marine transportation business increased by 412% from the previous year’s revenue of GH¢2.9 million to GH¢14.9 million. This was mainly due to the full deployment of all four barges of the company after they had undergone extensive renovation. Storage and rack revenue also saw a steady growth of 4% from GH¢50.4 million to GH¢52.6 million.

 

ENERGY MINISTER DECLARES AT AGM
• DR. MATTHEW OPOKU PREMPEH PRAISES MANAGEMENT FOR HUGE TURNAROUND

The government is to support the Bulk Oil Storage and Transportation (BOST) Limited to hold strategic stocks to ensure fuel security.
As part of its mandate, BOST is expected to hold a strategic stock of not less than six weeks of national demand.
The state-owned company, however, is unable to fulfill this mandate due to the lack of resources, after the strategic stock levy was scrapped in 2008 to bring down the cost of ex-pump prices of petroleum products.
At the maiden annual general meeting of BOST, the Minister of Energy, Dr Matthew Opoku Prempeh, said as part of the modalities under consideration, the government was working to ensure an efficient Tema Oil Refinery (TOR) to complement the efforts of BOST.
He said TOR would be empowered to refine products and deliver same to BOST for storage and distribution.
That, he said, would ensure local petroleum product consumers were saved from the difficulty of high prices of products, due either to the desire to make profit or real global challenges.

HON MATTHEW OPOKU PREMPEH 3

Dr Matthew Opoku Prempeh, Minister of Energy, delivering his address at the BOST 2021 Annual General Meeting.

 

After 11 years of struggles, BOST posted profit after tax of GH¢160.7 million for the 2021 financial year, compared to a loss of GH¢291 million in 2020.
The company also saw improvement in its core business, with an overall increase in gasoline and gas oil sales revenue by 83 per cent.
Revenue from gasoline sales increased from GH¢140 million in 2020 to GH¢340 million in 2021, with revenue from gas oil also increasing from GH¢227m to GH¢331m in the same period.
Revenue from marine transportation also increased from GH¢2.9 million in 2020 to GH¢14.9m in 2021.
Dr Opoku Prempeh described the performance as one of the phenomenal corporate turnaround stories in the public sector over the past decade.
“I have had the opportunity to take a look at the state of the company in January 2017 from a copious report I received and was surprised at the financial and operational out-turns of the company for 2021.
“From a debt position of $624m owed suppliers and related parties, BOST has, over five years, paid $611m, with internally generated funds contributing about $423m,” he added.

BOARD CHR2
The Board Chairman of BOST, Ekow Hackman delivering his speech at the AGM.

The Board Chairman of BOST, Ekow Hackman said the company’s revenue earning assets, which at a point declined to 34 per cent, had now increased to 95 per cent.
He said the restoration of part of the lost value of the BOST margin by the government in June 2021 had brought an element of financial stability to the company.
“This levy on petroleum price ensures that BOST can repair and maintain facilities in parts of the country such as Bolgatanga, Buipe, Savelugu and Akosombo, areas where private profit-oriented companies will not readily venture,” the chairman said.
He added that BOST had also regained the confidence of the financial community, with banks which had previously closed their doors to the company now welcoming it with credit lines and on more favourable terms.

KUDJOE

The Minister of Public Enterprises, Joseph Cudjoe

 The Minister of Public Enterprises, Joseph Cudjoe, described BOST’s achievement as phenomenal, saying to achieve that, his office, together with the State Interest and Governance Authority (SIGA) and the Ministry of Finance, helped in building the capacity of board members and chief executive officers in good corporate governance programmes.
“We have also introduced the Public Enterprises League Table (PELT), which maiden edition was held on June 30 to engender competition among public enterprises.
“Among the 50 entities that were ranked, BOST came eighth, which is not surprising at all, given its demonstration of good performance and turnaround,” he said.
For his part, the Director-General of SIGA, Edward Boateng, said in spite of the pertaining fiscal and infrastructural challenges of BOST, there was still more room for improvement.
He said with innovative thinking, perseverance and teamwork from all stakeholders, more could be achieved.

 

 

BOST makes turnaround after 11years; posts GH¢168.8 million profit, settles 80% debts

BOARD CHR
Ekow Hackman - Board Chairman of BOST


After 11 years of recording losses, the Bulk Oil Storage and Transportation Company Limited (BOST) made remarkable turnaround, recording GH¢168.8 million profit after tax last year.
The state-owned strategic petroleum storage distribution company, which was saddled with more than half a billion-dollar debt, has also been able to clear about 80 per cent of the debt off its books..
In the year under review, the company recorded total revenue of GH¢1.12 billion, which was almost double the amount of GH¢671.6 million that came from product sales, GH¢380.4 million from the BOST Margin, GH¢52.64 million from storage and rack, GH¢14.83 million from marine transportation, with GH¢2.07 million coming from products swap.
This came to light when the Managing Director of BOST, Edwin Provencal, together with the Board Chairman of the company, Ekow Hackman, interacted with the .Graphic Editorial team, during which the company's turnaround story was shared.
It was the second time in the year that the leadership of BOST has interacted with the Graphic.

Mr Provencal said when he took over BOST in 2019, the company was saddled with trade liabilities of $624 million.
“That meant that some people had brought in products but hadn't been paid or we traded at a loss and so we owed suppliers $624 million,” he said.
He said aside from the debt, the company had taken some guarantees from banks and had legacy loans totalling GH¢284 million.
In addition to that, BOST owed some bulk oil distribution companies (BDCs) to the tune of $37 million for products that had“If you take over a company and instantly people are in court with you and want their money, that looks very scary,” Mr Provencal noted.
However, as of the end of last year, he said, the company had managed to pay $611 million out of the $624 million debt it owed suppliers.
Out of the payment, the company's internally generated funds (IGF) accounted for 70 per cent ($426 million), with the government providing 30 per cent through the Energy Sector Levy Act (ESLA) bond, he explained.
“This tells you that the company has a huge potential and should not run at a loss,”
He said out of the GH¢284 million owed banks, the company had paid GH¢187 million through its IGF.
“It is my hope that by next year, we would have finished paying. It's a running loan and, therefore, accruing interest,” he indicated.
He said as the company started paying its debt to the banks, the banks realised that credibility was being restored and some of them decided to extend new credit to the BOST to bring in products.
With regard to the $37.6 million owed BDCs, Mr Provencal said, an internal forensic audit undertaken by BOST revealed that the debt was actually $10.1 million and not $37.6 million.
“This was done by my predecessors; when they came in, they decided to look into that matter again. So when I came in 2019, there was a committee set up to look into the matter again.
“All I did was to add the Economic and Organised Crime Office (EOCO) and the National Investigations Bureau (NIB) to the committee and the result of that internal forensic audit was that $37.6 million became $10.1 million,” he pointed out.
He said BOST had paid down on that debt as well and it was only left with $5.8 million.
Turnaround strategy
Mr Provencal said aside from paying down most of its debts through various interventions, the company had also brought back 12 of its 15 storage tanks, revamped its transmission pipelines and rehabilitated its tugboats and barges, which are all contributing to the revenue streams of the company.
Infrastructure challenges
He said besides the financial challenges that BOST was facing, it also faced a huge infrastructure challenge, which meant that only 17 per cent of its assets brought in revenue.
“We had bought some pipelines in 2008, and as of 2019 the pipelines were still at the mercy of the weather in Houston.
“Our pipeline from Tema to Akosombo was out of service; our Bolgatanga-Buipe pipeline was also out of service. Our marine facilities, the barges and the tug boats were not functioning and three out of our six depots were out of service, but we still had staff going to work,” the Managing Director bemoaned.
He said 15 out of its 51 tanks had also been decommissioned for lack of maintenance.
“So our assets which could have made us money were all shut down and we had only 17 per cent of our revenue earning assets in operation.
“We also had some tax arrears that we had not paid and our BOST margin was still 3Gp and remained so until 2019,” he said.
Fast forward to 2021 and Mr Provencal, who is a management consultant, said the company had now repaired 12 of the 15 tanks, fixed the pipelines, brought the pipelines from Houston, the barges were all back on track, the jetty had been fixed, while all old equipment had been taken out and a new one brought in.
Because of that, he said, the company was now exporting to Mali.
“Our export to Mali has grown from 0.3 per cent in 2019 to six per cent of Malian importation of petroleum products in 2020,” he noted.
Strategic reserves
He said although BOST was mandated to hold a strategic stock of not less than six weeks of national demand, it had been unable to do so effectively because nobody paid for it.
“The strategic reserves will give the country comfort, but It's like insurance - when you have insurance, you are supposed to pay for it. But nobody pays for the strategic reserves after the strategic reserves levy was scrapped in 2008. So anytime they ask me whether I have reserves or not, I say no,” he stated.
He said BOST, however, had some small storage that might last about 14 days but that could not be called a reserve in its right sense.
Political economy
Mr Provencal said the success of BOST had come with some push backs from some stakeholders who had cashed in on BOST's failures.
He said BOST had four main transportation mediums - the use of bulk road vehicles (trucks), barges and pipelines.
“There are some transport owners who have trucks and their livelihoods depend on the trucks, so it won't be in their interest if the pipelines of BOST and barges are working,” he explained with regard to the frequent allegations about the company's operations.
Mr Provencal said the board, the management and the staff of BOST were unperturbed and would continue with their resolve to make the company efficient
and profitable.

BOST turnaround will be sustained - CEO
The Chief Executive Officer of the Bulk Oil Storage and Transportation (BOST), Edwin Provencal, has given the assurance that the turnaround of the company to profit ways will be sustained.
“We are on a path to ensure that this State Owned Enterprise (SOE) contributes its quota to government revenue on a sustained basis.
“We are on a path to ensure that this State Owned Enterprise (SOE) contributes its quota to government revenue on a sustained basis rather than become a drain”, he told the Graphic Business in an interview on whether the company could be able to sustain its growth.
Against all odds, BOST recorded profit-before-tax of GH¢9.84 million for 2020.
That was against the estimated GH¢30 million recorded for last year and the loss of GH¢158.47 million in 2019.
Mr Provencal was confident that judging from the performance of the company in the year 2021, the profit of the company would be far better than what was achieved in 2020.
Explaining further the success story of the company, he said there was an increase in income earning assets from 18 to 91 per cent by repairing and replacing decommissioned assets.
For instance, he said, there were two depots added at Akosombo and Bolga, while 12 tanks, two pipelines, four river barges, one tugboat, pumps, loading arms were assessed.
Mr Provencal, who has also been widely hailed for the achievements at BOST, said there had also been “Improved asset utilisation by increasing customer satisfaction and acquiring new ones. “This reduced turnaround time from four hours to 1.5 hours”.

Mr Provencal also mentioned cost efficiency, and reduced administrative expenses from GHc533 million in 2016 to GhC208 million in 2020 in an inflationary environment.
“We also put in place a performance management system underpinned by the introduction of 15 new policies,” he said.
In the area of growth, he said the company acquired new customers and partnerships and leveraged the Bolga depot to drive exports to landlocked countries.
“We have exported over 500 trucks to Mali since 2021”, he added
He also noted that investment in the “growth of our people is also being consistently pursued through tailored training”.
Landmarks
In the past two years, the income-earning assets of the company had improved from 18 to 91 per cent.
The company has also been working to overturn the loss-making position of the company into profitability and this has been done through enhanced performance, driven by extensive operational efficiency initiatives.
In 2019, the company recorded GH¢521.60 million in revenue and loss-before-tax of GH¢158.48 million.
BOST in 2018, recorded revenue of GH¢263.64 million, against loss-before-tax of GH¢287.75 million.
Similarly, there were losses-before-tax of GH¢112.19 million in 2017 and GH¢533.19 million in 2016, according to data available

Mr Provencal also mentioned cost efficiency, and reduced administrative expenses from GHc533 million in 2016 to GhC208 million in 2020 in an inflationary environment.
“We also put in place a performance management system underpinned by the introduction of 15 new policies,” he said.
In the area of growth, he said the company acquired new customers and partnerships and leveraged the Bolga depot to drive exports to landlocked countries.
“We have exported over 500 trucks to Mali since 2021”, he added.

He also noted that investment in the “growth of our people is also being consistently pursued through tailored training”.
In the past two years, the income-earning assets of the company had improved from 18 to 91 per cent.

The company has also been working to overturn the loss-making position of the company into profitability and this has been done through enhanced performance, driven by extensive operational efficiency initiatives.
In 2019, the company recorded GH¢521.60 million in revenue and loss-before-tax of GH¢158.48 million.
BOST in 2018, recorded revenue of GH¢263.64 million, against loss-before-tax of GH¢287.75 million.
Similarly, there were losses-before-tax of GH¢112.19 million in 2017 and GH¢533.19 million in 2016, according to data from the company.

BOST TO BUILD LPG TANKS ACROSS ITS DEPOTS - MD
The Managing Director of BOST, Mr. Edwin Provencal, has disclosed that the company aim of building Liquified Petroleum Gas (LPG) storage facilities (Tanks) for the country was progressing steadily with the Front End Engineering Design (FEED) for the project almost complete.
He said the construction of the LPG Tanks at all BOST existing depots when completed will enable the company to store LPG as part of national strategic reserve for the country.
Mr.Provencal added that the LPG storage facilities was part of the Company’s strategy of aggressively growing its business by developing a network of storage tanks, pipelines, and other bulk transportation infrastructure throughout the country.
Mr Provencal was speaking during the end-of-year assessment stakeholder engagement with the media which was used to outline the company’s achievements for 2021 and plans for 2022.
The engagement provided a platform for BOST to share its success stories and challenges with the media as part of efforts to promote probity and accountability in the management of the company.
Mr Provencal said BOST has identified LPG products as one of the opportunities for its growth strategy.
The LPG storage tanks would contribute to meeting the growing demand for LPG products by consumers as it would generate more revenue for the government.
Mr Provencal revealed that BOST would continue to work towards becoming the number one fuel and logistics business operator in the West African sub-region.