- Positive Outlook as Oando Posts N8.5b Profit
Oando Plc has recorded N8.5 billion profit after tax (PAT) in its half-year result for the period ended June 30, 2018. The figure, which represents 86 per cent rise from the N4.6 billion it posted in the first half of 2017, indicates a positive outlook for the oil giant.
Further analysis of oil giant’s financials showed that its turnover grew by 11 per cent to N297.3 billion from N267 billion in the first half of last year and gross profit increased by 53 per cent to N51 billion compared to N33.4 billion last year.
In its upstream business, Oando recorded a net profit of N27.1 billion ($75.2 million) compared with N16.3 billion ($53.2 million) in the comparative period of last year.
The performance, which has continued to defy skeptics, was boosted by rise in the prices of oil and gas commodities. The result also reflected the perseverance and hard work of the oil firm.
Following the fall in oil prices, Oando, like other firms took a significant hit in its revenue and ultimately reported losses. However, it has since worked toward reversing its fortunes and reminding its shareholders that an investment in the company will indeed pay off. With its half-year 2018 results, it has posted its seventh quarter consecutive profit.
According to the firm’s statement, the increase in net income between the quarters was primarily due to higher revenues as a result of a general increase in the price of oil and gas commodities. Oando picked up on the industry recovery witnessed last year.
“Brent prices averaged $69.87 per barrel, resulting in a 38 per cent increase in realized crude selling price compared to the same period in 2017. Oando’s performance was further buoyed by sale price increases of 19 per cent for NGL and 13 per cent for natural gas deliveries, according to the statement.
Commenting on the results, Group Chief Executive, Oando Plc, Wale 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 (NNPC) 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.”
“Oando’s performance in the first half of 2018 is a continuation of the strong financial performance delivered last year. The company continues to increase its market share in the downstream sector through its trading business, Oando Trading (OTD). The 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 performance, Oando shareholder with the Sokoto Zone Shareholders Association, Alhaji Kabiru Tambari said: “This results reaffirm my commitment for the management of Oando. Seven profits in a row is no small feat. Not all companies who have gone through what this company has gone through in the last year would be able to come out this strong. I commend the management team and I hope they continue the good work.”
This year alone, the Nigerian Stock Exchange (NSE) added Oando to the most influential stocks group. The NSE picked Oando alongside Beta Glass Company as two of the 30 most capitalised stocks. With the Government’s announcement of outstanding subsidy payments due to various companies including Oando, the Company’s share price increased by 9.8 per cent.
Despite being in the middle of an indirect shareholder dispute which has led to a yet to be concluded Securities and Exchange Commission (SEC) forensic audit, a review of other activities pertaining to Oando in the first half of 2018 , it is evident that the company is committed to creating value for its shareholders.
Mrs. Oludewa Thorpe an Oando shareholder from the National Coordinating Committee of Shareholders Association spoke on the forensic audit, she explained that she is happy that Oando allowed the SEC to do a forensic audit and is hopeful that the outcome of the audit will be further evidence that the company is being managed well, in the interests of shareholders and is here for the long haul.
in a press statement 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.”
The expectation is that all indices will continue to remain strong and positive for Oando and that this proudly Nigerian brand will end 2018 winning.
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