Oando Nigeria Plc has posted a Profit After Tax (PAT) of N4.6 billion in its first quarter 2019 operations, against N4.2 billion achieved in the corresponding period in 2018, while turnover grew by 12 per cent to N168 billion from N150.6 billion in the same period.
Specifically, the company’s unaudited result for the first quarter ended March 31, 2019 showed 11 per cent increase in profit to N4.6 billion compared with N4.2 billion in Q1 2018.
According to a statement by the company, the Group also decreased its total borrowings by five per cent to N200.9 billion, compared with N210.9 billion in 2018, while its long term borrowing decreased by one per cent to N75.8 billion, against N76.8 billion in 2018.
The company explained that the figures also reflected an increase in production by 11 per cent at 43,745boe/day compared to 39,556boe/day in the same period of 2018 in Oando’s upstream subsidiary.
The company’s production activities reveals that oil production increased by 13 per cent from 14,823bbls/day in Q1 2018 to 16,815bbls/day in Q1 2019, whilst natural gas production increased by 18 per cent from 124,910mcf/day in Q1 2018 to 147,163mcf/day in Q1 2019.
“This is in line with the company’s Group Chief Executive, Adewale Tinubu’s promise to aggressively grow production organically and inorganically in its upstream business.
“Increased production speaks to just one metric that is supporting these strong financials; the company’s near-completion of the implementation of it’s widely spoken about corporate strategic initiatives is another strong contributor.
“Despite its partial divestment from its marketing subsidiary the company continues to increase its market share in the downstream sector through its trading business, Oando trading which recorded an 11 per cent increase year-on-year, driven by a strong performance in its crude oil trading division and a three per cent increase in turnover to $312 million, from $301 million,” the statement noted.
Tinubu said: “Our results reflect the progress made over the last few quarters and provides an indication of our expectation for the year. Now that our debt profile is down by 78 per cent from $2.5 billion as of December 2014 to $558 million, and our de-leverage program is 90 per cent complete with most of our non-core operations divested for good value, we can now focus on steady growth in our upstream entity.’’
According to him, in addition to the improved performance, Oando has recorded a few milestones in the quarter under review, notably its recent divestment of its 25 per cent residual interest in Axxela Limited to Helios Investment, a leading private equity firm with a focus on investments in Africa, signifying a complete divestment from its midstream business.
The total selling price for its 25 per cent interest was $41,500,000, creating real value from a non-core business activity of the Group.
“The move speaks volumes of Oando’s willingness to restructure its business for increased revenue generation by focusing on its dollar-earning businesses, Oando Energy Resources (OER), its exploration and production subsidiary, and Oando Trading its trading business.
“The divestment from its naira denominated businesses, specifically its marketing subsidiary, which forms the company’s heritage, speaks to true courage.
“To be so focused on returning value to shareholders even if it means letting go of what were essentially still strong businesses, evidenced by buyers such as Helios and Vitol, the world’s largest independent trader of energy products must be recognized and applauded, ” he added.