ORCA Exploration has recorded a net income of 2.2 million US dollars in the first half of this year compared to a net loss of 4.2 million US dollars in the corresponding period last year.
Orca, parent company of PanAfrican Energy, said in financial results that the improved results for the first six months of the year were primarily due to the lower provision for doubtful accounts for TANESCO.
The provision was “partially offset by participatory interest costs on the IFC loan which started to accrue in Q1 2017 and higher indirect tax in 2017,” Orca said in a statement.
The natural gas supply firm said due to lower provision net cash flows from operating increased by 310 per cent to 20.8 million US dollars in H1 compared to 5.1 million US dollars in last year’s H1.
“The increase is primarily a consequence of the continued improved collections from TANESCO since the second half of 2016,” the financial results showed.
However, the firm’s cash flows from operations, which include the net change in working capital in the period by 33 per cent for the six months ended June to 10.5 million US dollars compared to 15.6 million US dollars similar in period last year.
“The decrease is primarily a consequence of the fall in the company’s operating revenue due to the change in the TANESCO revenue recognition criteria together with lower sales of additional gas volumes and associated profit gas entitlement,” the statement said.
Going by quarterly basis, Orca recorded a net loss of 0.6 million US dollars in the second quarter of this year against a net income of 1.5 milion US dollars in the similar period last year.
On other hand the firm also reported a decrease in operating revenue by 13 per cent in H1 of this year after the management modified its revenue approach. The revenue went down to 23.7 million US dollars in this year H1 from 27.3 million US dollars similar period last year.
“… The decrease was primarily related to management of the company modifying its approach to revenue recognition as it relates to TANESCO only,” said Orca.
Since last October, Orca recorded a percentage of the amounts invoiced to TANESCO for revenue recognition purposes determined by comparison of TANESCO’s historical payment history to the amounts invoiced by the company over the previous three years.