Oando Plc records strong performance in YTD September 2018 report

Oando Plc records strong performance in YTD September 2018 financial report

Oando Plc records strong performance in YTD September 2018 report

Oando Plc, Nigeria’s leading indigenous energy solutions provider, has announced unaudited results for the nine months period ended September 30, 2018. Oando is listed on both the Nigerian and Johannesburg Stock Exchange.

Commenting on the results Wale Tinubu, Group Chief Executive, Oando Plc said:

“Today’s positive result is further evidence of the progress made by Oando in 2018 driven by our continued focus on execution and operational efficiency, supported by buoyant commodity prices. The outlook for the remainder of the year is positive, and we remain committed to delivering on our value-based strategy towards improving our liquidity by reducing our gearing, improving our profitability by increasing production, and achieving growth via strategic alliances.”

Results Highlights

Strong top and bottom line performance

  • Turnover increased by 32%, N505.1 billion compared to N383.5 billion (YTD September 2017), driven by higher commodity prices.
  • Profit-After-Tax increased by 46%, N10.4 billion compared to N7.1 billion (YTD September 2017).

Optimized balance sheet

 

  • Total Group Borrowings decreased by 4%, N227.2 billion compared to N237.4 billion (FYE 2017).

Operational efficiency combined with a favourable environment

  • Brent prices averaged $72.25 per barrel, resulting in a 45% increase in realised crude selling price compared to the same period in 2017. The performance was further buoyed by sale price increases of 6% for NGL and 31% for our natural gas deliveries.
  • Overall working interest production in the period increased to 40,039 boe/day, compared with 39,844 boe/day in the same period in 2017.
  • Over 10 million barrels of Crude Oil traded and 445,483 MT of refined petroleum products delivered, compared to over 11 million barrels of crude oil traded and 795,381 MT of refined products delivered in the same period of 2017.

Finance Review

Revenue

Revenue for the period was N505.1 billion, an increase of 32% compared to the same period in 2017 (N383.5 billion). This was primarily driven by an increase in commodity prices. In the nine months to September 30, 2018, gross sales price for oil increased by 45% to $71.42/ bbl from $49.42/ bbl in the same period in 2017. Sale price for natural gas and NGL also increased by 31% and 6% respectively.

Gross Profit

Gross Profit for the first nine months was N77.6 billion, an increase of 9% compared to the same period in 2017 (N71.2 billion). The increase is primarily driven by higher revenue as a result of higher commodity prices.

Profit-After-Tax

Profit-After-Tax for the period was N10.4 billion, an increase of 46% compared to the same period in 2017 (N7.1 billion).

Outlook

Brent continues to trade at over $75 per barrel at the start of the fourth quarter, supported by inventory reductions and geopolitical tensions. Oando’s upstream business is well positioned to take advantage through production growth via investment in targeted profitable projects, whilst maintaining fiscal prudence.

The Trading business of Oando continues to focus on developing key supply mechanisms in order to facilitate its expansion of trading structures across the face of Africa as well as solidifying its position in Nigeria.

Oando Plc as a whole continues to implement programs to improve operational efficiency and maintain capital discipline to assure profitability regardless of the market context.

Oando CEO Assures Shareholders of Return to Dividend Payment

 

 

The Chief Executive Officer (CEO) of Oando Plc, Mr. Wale Tinubu last Friday said the company would soon begin to deliver returns to shareholders.

Tinubu, who stated this at the annual general meeting (AGM) of the company in Lagos, said despite the challenging yet improving operating environment, the company remained bullish on its prospects for the future and ability to grow as a business.

 “The initiatives executive over the past years have shifted our assets portfolio towards an optimum and efficient level to provide the returns our shareholders deserve. We look forward to a fruitful 2018 when those initiatives begin to deliver the expected returns and in turn grow shareholder value,” he said.

Meanwhile, Oando Plc has reported a profit after tax (PAT) of  N8.5 billion for the half year(H1) ended  June 30, 2018, showing an increase of 86 per cent from N4.6 billion recorded in the corresponding period of 2017.

Commenting on the results, Tinubu said: “I am pleased to report that Oando Plc has made significant progress in 2018, evidenced by our substantial free cash flow generation and profitability. Oil prices have rallied over the last year, a direct consequence of increasing demand and reduced supply. Higher oil prices, and the resolution of Joint Venture funding challenges with the Nigerian National Petroleum Corporation has driven increased investment in the upstream sector. This stable operating environment, coupled with our fiscal prudence, has reinforced our solid financial footing as we continue to build on the momentum garnered in 2017.”

 

The company’s performance in the first half of 2018 is a continuation of the strong financial performance delivered last year and in the first quarter of 2018. Oando continues to increase its market share in the downstream sector through its trading business, Oando Trading (OTD). OTD recorded average trading volumes of 8.1 million bbl in the six months ended June 30, 2018 with a total of 6.6m barrels of crude oil and 195,497 MT of petroleum products traded in the first half of the year.

 Speaking on the outlook for second half of the year,  the CEO said: “We will continue to drive growth and profitability via our dollar earning portfolios. Our plans in the upstream involves production growth via investment in targeted profitable projects whilst maintaining fiscal prudence, to ensure we remain less sensitive to short-term price fluctuations. In our Trading business, current plans for growth include expansion of our trading structures in Africa, capitalizing on expanding scope in Southern and East Africa, as well as developing key supply mechanisms into the Middle East and North Africa.”