Thabo Kgogo. Picture: FREDDY MAVUNDA
Thabo Kgogo. Picture: FREDDY MAVUNDA

Exchange-rate movements and impairments hit profits for oil and gas junior SacOil Holdings in the year to February, but management expects its recent acquisition in SA will change its fortunes in the coming year.

In the next few months, it would reveal a new name with its more balanced profile and stronger financial position, CEO Thabo Kgogo said on Wednesday. SacOil, which has activities across Africa including oil extraction in Egypt, oil trading in Nigeria and exploration in the Democratic Republic of Congo (DRC), in March bought its first operation in SA, a 71% stake in Afric Oil, a distributor of fuel to government and businesses.

The price has been adjusted downwards from the initially announced R200m to R183.4m, of which R39m in cash and R89.5m in shares would be payable when the deal closes. The rest is a contingent amount to be paid in 12 months’ time.

SacOil has secured a R162.6m bridging loan to finance the deal and provide working capital from Gemcorp Africa Fund I, repayable from a rights issue which SacOil will hold in the 12 months. It said the Afric Oil deal and the Gemcorp loan dealt with the uncertainty over its going-concern status.

At the end of February, SacOil held R18.7m in cash compared with R107.3m a year previously.

The company had an after-tax loss of R211.8m for the year to February. It generated R1.17bn in revenue from trading crude oil sourced from Nigeria and R5.3m from the Lagia oil field. But profits were hit by R124.6m of foreign exchange losses on its dollar-denominated assets and R170.8m of impairments on money due from two legal matters, with Transcorp and Encha.

Kgogo said the priority in the coming year would be to integrate the Afric Oil acquisition. The company will also drill a new pilot well at Lagia to deak with water issues and is likely to submit a bid to renew its oil trading contract in Nigeria.

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