Managing Director of BOST, Edwin Pronvecal

The Bulk Oil Storage and Transportation Company Limited (BOST) has dismissed report by the State Interest and Governance Authority (SIGA) that it recorded a loss of ¢291.02 million in 2022.

According to SIGA, BOST posted a net loss of ¢291.02 million in 2020, representing a 186.97% increase on the net loss of ¢101.41 million posted in 2019.

But in a statement, BOST said “the report of the ¢400 million losses made by BOST is not accurate. To measure the profitability and operational efficiency of a Business one must determine whether the underlying operations (core business) of the company are profitable.”

“The Managing Director in his submission at SIGA was emphatic that the company achieved a profit before tax of ¢9.844 million versus an estimated ¢30million in year 2020 as against a loss of ¢158 million in 2019. The positive net profit before tax attained in 2020 implies a massive turnaround of the operational fortunes of the company. This was the basis of the MDs assertion at the SIGA engagement buttressed by publications from media houses like the Daily Graphic and GNA. He was however quick to add that, unpaid tax obligations over the five-year period to date, the reduction in the value investment in GOIL and forex difference on dollar denominated loans May turn the profit before tax into a net loss for the period”, the statement explained.

It added that its income-earning assets in the past two years has improved from 18% to 91%.

On the net loss after tax, it said there were several events outside management’s control that impacted the overall business negatively, thus posting a loss in 2020, captured in the statement of comprehensive income.

“Firstly, BOST as part of its drive towards operational excellence undertook a revaluation of its assets in the 2020 financial year. This had become necessary as most of the assets still in operation had been written down to near-zero levels whilst still useful in the operations of the company. As required by the International Financial Reporting Standards, IFRS, when assets are revalued, the increase in their values is taxed resulting in larger tax obligations. The revaluation which was a deliberate decision to enhance the reporting of the company led to a deferred tax obligation of ¢292.93 million compared to the net loss of ¢291.01 million, a difference of ¢1.918 million. The increase in the value of the revalued assets also resulted in increased depreciation charges which further reduced the bottom-line or the profit for the year”, it said.

“Secondly, BOST owns a 20% stake in GOIL. In any financial year, any loss in the market value of shares of GOIL is computed and that reduces the income of BOST to arrive at its net profit or loss for the year. In the year 2019 to 2020, our investment in GOIL saw a reduction of ¢15.674 million its market value. Respectfully, this event is external to BOST operations and therefore to gauge the performance of BOST management and staff by this loss in investment will not be fair. This is the reason why we should rely on the profit before tax rather than all these uncontrollable factors which have been factored in to arrive at the net profit or loss for the year.”

“Your Company, BOST has been turned around”, adding “any comprehensive and objective analysis of the audited statements for the past five years will show a company on track to higher performance through enhanced efficiency and we look forward to capitalizing on these modest improvements to make BOST an example of a World-Class State-Owned Enterprise”.

It concluded that “it remains uncontested that the debt to suppliers and related parties of $623 million has been paid down to $39 million, the debts owed the local banks of about 273 million has been fully cleared and our pipelines which were procured in 2011 and left to the mercy of the weather in the United States under the AT & V contract have arrived safely on our shores and we expect to complete the installation of the additional 12 inch pipeline between the Accra Plains and Akosombo depots.

Additionally, it said “the cash flow position of the company is enhanced and the repair of the company’s infrastructure continues despite the reduction in our BOST Margin. In conclusion, we reiterate the fact that your company BOST is on its way to becoming a profitable state-owned enterprise and nothing will derail the resolve of management and staff to achieve this.”