Oando Plc started the 2019 business year on a strong footing as the indigenous energy group recorded double-digit growths in top-line and bottom-line earnings in the first quarter. Net profit rose by 11 per cent to N4.6 billion in the three-month period, raising prospects that the company will sustain its consecutive growth in recent years. Oando recently released its full-year results for 2018, its third consecutive year of net profitability.
Key extracts of the interim report and accounts of Oando for the three-month period ended March 31, 2019 released at the weekend at the Nigerian Stock Exchange (NSE) showed that turnover rose by 12 per cent to N168 billion in first quarter 2019 as against N150.6 billion in first quarter 2018. The company’s production had increased by 11 per cent from 39,556 boe per day in first quarter 2018 to 43,745 boe per day in March 2019. Operating profit rose by 15 per cent from N14.9 billion to N17.1 billion while profit after tax increased by 11 per cent from N4.2 billion to N4.6 billion. The balance sheet also showed continuing decline in total group borrowings, which declined by five per cent to N200.9 billion
Chief Executive Officer, Oando Plc, Mr Wale Tinubu said the first quarter results reflected the progress made over the last few quarters and provided an indication of 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 currently, 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,” Tinubu said.
He noted that with ICE Brent Crude Oil price currently at a decent level of $74.48 per barrel, the company’s efforts will be geared towards increasing its production to sustain profitability and position itself on the path to resumption of dividend payment to shareholders.
Oil prices have recovered to over $74 per barrel as at the end of April 2019 after reaching a low of just over $50 per barrel at the end of 2018.
“We expect prices to remain at their current levels in the near term. As a business, our focus will be largely on driving profitability via growth in our upstream business and achieving further reduction of borrowings,” the company stated.
In the upstream, Oando said it will pursue production growth initiatives through strategic alliances, whilst ensuring operational efficiency and fiscal prudence.
According to the company, it will also continue to work with its partners to achieve cost optimization on Joint Venture operations, ensuring the gains from higher revenues are not lost to increasing operating costs.
Oando added that its trading business’s primary focus will be geared towards growing existing market share in Nigeria while leveraging on its relationships with international financiers.