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The management of the Bulk Oil Storage and Transportation (BOST) Company Limited has set the record straight regarding a series of publications making rounds on several online portals contradicting the announcement by the Managing Director, Edwin Provencal, that BOST has made an operating profit before tax of GHC30 million and a report from SIGA indicating BOST has incurred losses to the tune of GHC400 million.

Correcting the erroneous impressions created by the publications, the management of BOST said that the report of the GHC400 million losses made by the company was not accurate but rather was picked out of context.

Explaining the inaccuracies in the publications to the media, Mr Edwin Provencal, the Managing Director of BOST said that his submission at SIGA was emphatic that the company achieved a profit before tax of GHC9, 844,673 versus an estimated GHC30 million in the year 2020 as against a loss of GHC158, 478,676 in 2019.

He further stated that the positive net profit before tax attained in 2020 implied a massive turnaround of the operational fortunes of the company as the previous records from 2016 to 2020 showed negatives except in the year 2020.

Mr Provencal however was quick to add that during his submission at SIGA, he indicated that the unpaid tax obligations over the five-year period to date, the reduction in the value of their GOIL investment, and the forex difference on dollar-denominated loans would turn the profit before tax into a net loss for the period.

“This enhanced performance was driven by extensive operational efficiency initiatives including, but not limited to massive repair works of our storage tanks, pipelines and marine assets, replacement of outmoded parts across the facilities of the company in the last two years supported by improved marketing and customer service. In the past two years, our income-earning assets have improved from 18% to 91%”, he stated.

He added that the false publication making waves, stating that BOST made losses of GHC400 million was based on net loss after tax which was outside management’s control, impacting the overall business negatively thus posting a loss for the year 2020 in the statement of comprehensive income.

He said it would only be fair to analyse the performance of BOST based on the profit before tax and not the net loss after tax; thus, the profit before tax accurately measures the success of the company as that was within the control of management.  

He averred that BOST as part of its drive towards operational excellence undertook a revaluation of its assets in the 2020 financial year.

“This became necessary as most of the assets still in operation had been written down to near-zero levels while still useful in the operations of the company…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 GHC292,935,973 compared to the net loss of GHC291,017,758, a difference of GHC1,918,215”, he stated.

The MD for BOST reiterated that 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.

He again recounted that since BOST owns a 20% stake in GOIL, any loss in the market value of shares of GOIL was computed and that reduced 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 GHS15, 674,525 in 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. The recorded net losses for the years 2019 and 2020 per the income statement were, therefore, GHS101, 411,781 and GHS291, 017,758”, he recalled.

Mr Edwin Provencal insisted that BOST has been turned around as the comprehensive and objective analysis of the audited statements from the past five years showed that the company was on track to higher performance through enhanced efficiency.

He stated that Bulk Oil Storage and Transportation (BOST) Company Limited looks forward to capitalizing on these modest improvements to make the company an example of a World-Class State-Owned Enterprise.

“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 GHS273 million have 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.

“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…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”, he assured.