Oando rebounds to profitability, posts N3.5 billion

Oando Plc, Nigeria’s indigenous energy group listed on both the Nigerian and Johannesburg Stock Exchange has earned a Profit-After-Tax of N3.5 billion in 2016 compared to a loss of N47.6 billion in 2015.

This represents an increased of 107 per cent in the company’s profit for the year ended December 2016.The company’s turnover increased by 49 per cent to N569 billion compared to N382.0 billion in the previous year.

Oando’s net debt also reduced by 35 per cent to N230.6 billion compared to N355.4 billion in the previous year.According to the company, Oando Energy Resources (OER) recorded a 20 per cent decrease in total production to 15.9MMboe from 19.9MMboe in comparative period of

In the midstream, the company said that it completed the partial divestment of 49 per cent of the voting rights in the company’s midstream business subsidiary, Oando Gas and Power Limited (OGP), to Glover Gas & Power B.V., a special purpose vehicle owned by Helios Investment Partners (Helios), a premier Africa-focused private investment firm for $115.8 million.

It disclosed: “Oand Gas and Power (OGP) concluded the sale of Akute Independent Power Plant for a transactional value of N4.6bn.“Oando successfully concluded the recapitalization of its downstream business for $210 million by HV Investments II B.V., (HVI), a joint venture owned by Helios Investment Partners (Helios), a premier Africa-focused private investment firm and the Vitol Group (Vitol), the world’s largest independent trader of energy commodities.

“Oando Trading witnessed continued growth resulting in a 106 per cent increase in traded volumes of Crude Oil and Refined Petroleum Products, accomplished through a number of structured and well executed initiatives.

“Physical volumes of 13 million barrels of crude oil and 1.3 million MT of refined petroleum products were transacted.“Trading revenues hit a four-year high at $1.4 billion.”

Commenting on the result, Group Chief Executive, Oando Plc , Wale Tinubu, said that 2016 saw the country plunge into a recession, the first in over two decades, besieged with liquidity constraints, devaluation of the naira and a slump in oil earnings due to low oil prices intensified by the insurgency in the Niger Delta.

According to him, the company was proactive in the timely execution of restructuring programme of growth in its upstream division; deleverage, through divestments resulting in a net debt reduction of N125 billion; and profitability by focusing on dollar denominated earnings.

He added: “In the, upstream we witnessed a decline in production but an increase in our 2P Reserves from 445mmboe in 2015 to 469mmboe. We are hopeful that the Federal Government will establish a long-term resolution to the conflict in the Niger Delta, which will positively impact the oil and gas industry, consequently ramping up our daily production. In the Midstream we concluded the partial divestment of Oando Gas and Power (OGP) to Helios Investment Partners to further expand our gas footprint, whilst in the Downstream our trading business continued to make in-roads in crude lifting. As we enter a new phase in our business evolution we are optimistic about 2017 and look forward to even more successes having braved the challenges of 2016.”