It is no news that Conoil Plc and Chevron Oil Nigeria Plc are two of the best known petroleum marketing companies in Nigeria with both listed on the Nigerian Stock Exchange (NSE).
A comparison of their sizes shows that Conoil is clearly the bigger of the two. For the 2008 financial year, it grossed N124.3 billion, had a pre-tax profit of N3.3 billion, employed assets worth N56.8 billion and deployed equity worth N11.9 billion. On the other hand, Chevron grossed N48.7 billion, had a pre-tax loss of N305.7 million, employed assets worth N11.3 billion and deployed equity worth N1.9 billion. Although a bigger size does not necessarily make a company more profitable than its peer, Conoil outperformed its peer for their 2008 financial year. It outshined its peer in all profitability ratios examined, namely pre-tax profit growth rate, return on assets, return on equity, pre-tax profit margin, pre-tax profit per employee and operating margin.

Turnover growth rate
This performance ratio shows that Conoil outperformed Chevron in the current financial year. For the year, the company recorded a turnover growth rate of 43.1 per cent as compared with negative 4.1 per cent recorded in the previous. This means that for the 2008 financial year, Conoil was able to grow its profit base rather than record a decline as it did in the prior year.
On the other hand, Chevron recorded a decline rate of 32.9 per cent, as turnover for the year was lower than that of the preceding year. This result was also worse than the 10.2 per cent result achieved in the preceding year.

Pre-tax profit growth rate
In terms of pre-tax profit growth rate, Conoil emerged the winner between the two petroleum companies. It is however worthy of note that Conoil was the better of the two not because it grew its profit base commendably, but because the decline recorded by its pre-tax profit was much milder than that of Chevron. For Conoil, pre-tax profit decline rate was 12.6 per cent. On the other hand, Chevron’s pre-tax profit growth rate fell from 61.7 per cent recorded in 2007 to a decline rate of 110.2 per cent in the current financial year. This is as a result of the loss of about N305.7 million (rather than a profit) the company recorded in the review year.

Return on assets
For the 2008 financial year, Conoil led its peer when their return on assets results are examined. In the current year, Conoil deployed assets worth N48.6 billion and had a return on assets of 5.8 per cent as against the 9.5 per cent achieved from N39.5 billion assets set out in the preceding year. These are better than negative return on assets recorded by Chevron in 2008 (negative 2.7 per cent). It is worthy of note that in the previous year Chevron achieved a better result on return on assets (14.3 per cent) than Conoil did. Analysis shows that for every N100 assets deployed by Conoil in 2008, N5.80 accrued to its pre-tax profit. On the other hand, for every N100 assets set out by Chevron a loss of N2.70 accrued to the company.

Return on equity
Conoil also recorded a better return on equity (ROE) than Chevron did in the 2008 financial year. Conoil operated with shareholders’ fund worth N11.9 billion and recorded a return on equity of 15.3 per cent, down from 21.6 per cent recorded in the previous year. This 15.3 per cent performance is much better than negative 11.7 per cent achieved by Chevron. Analysis shows that for every N100 worth of equity employed by Conoil, N15.30 accrued to its profit after tax. On the other hand, for every N100 worth of shareholders’ fund of Chevron N11.70 accrued to its loss after tax obligations.

Pre-tax profit margin
Conoil continued its winning trend by outperforming its peer in terms of pre-tax profit margin. For the year, its pre-tax profit margin stood at 2.6 per cent, down from 4.3 per cent performance achieved in the previous year. On the other hand, Chevron recorded a negative pre-tax profit margin of 0.6 per cent. It is worthy of note that Chevron’s pre-tax profit margin of 4.1 per cent in 2007 was also lower than that of Conoil (4.3 per cent).
Analysis shows that of every N100 income earned in 2008, N2.60 made it to Conoil’s profit position while 60 kobo made it to Chevron’s loss position.

Pre-tax profit per employee
Conoil took the lead when the two companies were examined as regards average employee contribution to profit. For the year, the company’s pre-tax per employee stood at N24.7 million, an improvement on the N11.0 million recorded in the erstwhile year. The result on N24.7 million was also better than that of Chevron. Analysis has it that on average an employee of Conoil contributed N24.7 million to the company’s profit. On the other hand, an employee of Chevron in the year under review, contributed about N1.2 million to the company’s loss.

Operating margin
The 2008 financial result proved that Conoil did better than Chevron as regards operating margin in that the company kept it as low as possible. Conoil carefully achieved a 5.8 per cent operating margin, better than 8.0 per cent recorded in the prior year. Also, Chevron had an operating margin of 9.9 per cent, higher and worse than the 7.1 per cent result achieved in the previous year.