Experts say diversification of Julius Berger to oil sector will change its fortunes

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Investment analysts have said that the plan by Julius Berger (JB Plc) to veer into the oil and gas business through a strategic partnership with Petralon Energy Limited will lead to a change of financial fortune for the company, Vanguard reports.

Commenting on the partnership, Mr. Aigboje Higo, Managing Director, Capital Bancorp Plc, who lauded the initiative, said it is not surprising that JB has decided to diversify more due to the constraints in the construction and engineering sector. He said that the choice of partner for the oil and gas project, as well as a plan to build an independent power plant was commendable.

In his comments, Tola Odukoya, Managing Director/CEO, FSL Assets Management, stated: “The move bolsters the strategic statement of the company regarding its intention to diversify and expand its business activities significantly, thereby reducing its reliance on its core area i.e. construction. Barring any unforeseen and unpleasant developments, one would expect such an initiative to bode well for the company, its businesses and shareholders.”

Charles Fakrogha, a stockbroker and Chief Relationship Officer, Foresight Securities and Investment, said the company will earn additional income, while shareholders value would be enhanced. “We need to also realize that Julius Berger has done and is still doing a lot for the oil and gas sector. I believe that their experience in construction in the oil industry will give them easy operation in their new role,” he stated.