Sell Shares in GOIL or Risk Loss – CEMSE to SSNIT & BOST

The Executive Director of Centre for Environmental Management and Sustainable Energy (CEMSE), Benjamin Nsiah, has raised an alarm on the profit decline of the Ghana Oil Company Limited (GOIL).

According to him, the company’s significant losses have prompted calls for the two major shareholders, the Social Security and National Insurance Trust (SSNIT) and the Bulk Oil Storage and Transportation (BOST) to divest their shares in GOIL due to poor performance.

He calls for urgent action to divert or diversify these investments into more lucrative ventures. “The evidence from the annual reports and performance of GOIL over the years indicates that BOST and SSNIT’s investment in GOIL is not safe or profitable.”

He added that, GOIL’s decline in shares makes the company unappealing to investors, raising concerns about its future financial stability. “BOST has earned less than Ghc10 million in dividends from GOIL since 2018, impacting its operations.”

As major shareholders with 25% and 20% stakes respectively, SSNIT and BOST have seen disappointing dividends from GOIL, affecting their ability to meet obligations.

Mr. Nsiah highlighted a stark decline in GOIL’s shareholder value, with share prices plummeting by 52% since 2018. He compared it unfavorably to competitors like TotalEnergies Marketing Ghana PLC, which have seen significant increases in share prices.

Mr. Nsiah warned that GOIL’s failure to submit their audited financial statements for 2023 to the Ghana Stock Exchange by the April 22nd, 2024 deadline could further impact their share price due to non-compliance with stock exchange regulations.


Find below the full statement

9th May, 2024

SSNIT and BOST must sell their shares (Investment) in GOIL

The Social Security and National Insurance Trust (SSNIT) and the Bulk Oil (Energy) Storage and Transportation are two of the highest shareholders of GOIL owning 25% and 20% respectively aside government’s ownership of about 35% in the total shares of the company. These two state owned entities invested in GOIL because of the expectant dividends from GOIL to fund their operations as well as expand their operational activities.

SSNIT has been in the media for their inability to pay TIER 2 benefits to contributors because of insignificant dividends received from GOIL. In 2022, SSNIT promised to exit some unprofitable investment because the losses from investment made the firm look financially unhealthy.

A research by Centre for Environmental Management and Sustainable (CEMSE) from the various annual general meetings of BOST revealed that it has averagely earned less than Ghc10 million as dividends from BOST since 2018. Specifically in 2023 BOST, the Board Chair of BOST did not declare any dividend in 2022 from GOIL when enumerating the source of revenue for the firm end of year 2022. Revenues from GOIL are mostly insignificant and for that matter BOST in recent times had to compel the energy ministry to increase BOST margin by 100% to 12 pesewas to fund its operations

The two state owned companies investments in GOIL must be as a matter of urgency stopped because the structure and operations of GOIL does not make it an efficient company that will yield appropriate Return on Investment to BOST or SSNIT.

Some of the reasons why these two companies must sell their shares in GOIL :

1. The share price of GOIL has dropped from Ghc3.12 in 2018 to Ghc1.50 as at March, 2024 representing about 52% loss in value over the period of six years while TotalEnergies Marketing Ghana PLC share price increased from Ghc3.4 to Ghc9.50 as at March 2024. The drop in share price of GOIL implies the company is becoming unattractive to investors, and that has negative effect on the future equity of the company.

2. Gross margin of GOIL in 2022 was Ghc0.046 and in 2023 increased to Ghc0.049, implying that the firm makes less than 5 pesewas on each Ghc1.00 sales. However, TEMGL makes Ghc0.10 on each Ghc1.00 sales. GOIL is making less because they are less cost efficient in their cost sales considering that both companies sell their products always at the same price, and in most cases GOIL priced their products expensive compared to TEMGL.

3. Operating profits margin further reveals the efficiencies at GOIL. The firm operating margin is mostly 80% of their Gross profit margin. For instance, in 2022, gross profit margin was Ghc0.0462 while operating profit margin was Ghc0.0127 and in 2023, their gross profit margin was Ghc0.0493 and their operating profit margin was Ghc0.0106. Contrary, TEMGL spends half of their gross profit on operations and for that matter their operating margin is always half of their gross profit margin. The operational inefficiencies was revealed in the 2023 unaudited financial statements of GOIL which indicates that operating expenses increased by about 18% although their revenue declined in the same period. This means that GOIL does not factor their revenues before expending.

4. The underperformance of GOIL is still reflected in their profitability where their profitability declined by 69% in 2023 compared to TEMGL which had a profit increase of about 5%. The decline in profit affects BOST and SNNIT because their dividends has slashed by about 69% in just one year affecting pensioners and SSNIT. The question of inefficiencies is raised when GOIL is considered the largest marketer in terms of volumes and highest priced OMC yet makes a drop in profit while other less priced and less volumes sales are all making equal profit of Ghc25 million in 2023.

5. The ROA, ROE, and debt to equity all reflects the underutilization of assets, equity and debt levels are high which will ultimately affect the going concern or sustainability of the company. For instance, the firm made less than 1 pesewas on each Ghc1 assets they have in 2023 while TEMGL made about 10 pesewas on each Ghc1.00 assets in the same year. On return on ROE, GOIL made 4 pesewas on each Ghc1.00 equity investment while TEMGL made 30 pesewas on each Ghc1.00 equity investment. This goes to confirm the wastage in the operations of GOIL which does not inure to the benefit of its investors especially.

6. Their inability to support their audited financial statements of 2023 to the Ghana Stock Exchange, deadline 22nd April, 2024 will also affect their share price in future because they have shown known compliance to the rules and regulations of the stock exchange.

The evidence from the annual reports and performance of GOIL over the years indicate that BOST and SSNIT investment in GOIL are not safe as well as unprofitable, and for that matter these investments must be diverted or diversified into other businesses that yields the needed dividends to improve the social security framework of Ghana as well as the operations of BOST. Good investment by BOST will engender the removal of Ghc0.12 per litre on fuel which affects petroleum users.



Benjamin Nsiah

Executive Director, Centre for Environmental Management and Sustainable Energy (CEMSE)


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