Oil & Gas company, Eterna Plc, recorded a significant decline in its revenue in the first half of 2020 when compared to the corresponding period of 2019, its financial statements for the first half of 2020 has disclosed. This reflects the struggles of the oil industry since the oil price war between Saudi-Arabia and Russia amid to the COVID-19 outbreak.
In the financial statement seen by AllNews, Eterna Plc reported that it generated N28.5 billion in the first half of 2020, from January to June this year, failing to near the N155.7 billion it generated as revenue in the corresponding period of 2019.
The cost of sales, which is the cost of production for the period of the first six months of 2020, was drastically cut to N26.7 billion, when last year first half, the company had spent N153.4 billion. The drop in cost of sales for this year's first half, however, made Eterna Plc record an increase in gross profit.
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In the first half of 2020, Eterna Plc reported N2.3 billion as gross profit, higher than the N2.2 billion generated in the correspnding period of 2019. Meanwhile, as a Group, Eterna Plc reported N71.8 million as Profit before tax, compared to the N165 million it reported for first half of 2019.
But as a company, it reported N104.3 million as Profit before tax in the first half of this year, lower than the N245.8 million the company reported as Profit before tax same period in 2019.. Also, on the financial statements, Eterna Plc reported N66.5 million as profit for the year, compared to the N112.2 million disclosed for 2019 first half. While it reported N33.6 million as Profit for the year for the Company in 2020 first half, as against the N167.1 million recorded for 2019 first half. Click the link to see full statement.
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The decline in Eterna Plc's 2020 first half revenue in relation to the corresponding period of 2019 was due to the negative impact of COVID-19 pandemic in the oil industry and the lockdown that was adopted by countries to curb the coronavirus from spreading further.
Key sector clients of the oil and gas market were shutdown for about two months in Nigeria, affecting the earnings of oil companies. Low demand also affected the oil price as the market was saturated with oil nobody wanted to buy due to restriction of movements. Also, Russia and Saudi Arabia's oil price war crashed the oil price, thereby, affecting oil companies' revenue.