Oando records significant reduction in debt profile

Strengthens subsidiaries for optimal returns

Oando Plc has announced a significant improvement in its balance sheet, following a reduction in total debt profile from N500 billion in 2014 to N150 billion by September 2016.

Indeed, the firm, which had incurred huge debt profile in the last few years due to over exposure to oil business, has returned to profitability, going by the profit made in the first quarter of 2016.

Not withstanding the harsh operating environment, the company had, in the last 12 to 18 months of operations reduced its debt loan by N400 billion, concludes recapitalization and partial divestment of equity stake in its downstream operations.

Speaking in an interview with The Guardian, during the company’s ‘Fact Behind the Figures’ held at the Nigerian Stock Exchange (NSE) in Lagos on Monday, the Group Managing Director of the company, Wale Tinubu explained that company has made significant efforts to improve the quality of its balance sheet in each of the subsidiaries through partnership and recapitalisation the gas business.

“We now focus more in bringing equity in our business, using less bank debt and more equity in developing our operations.

“In 2014, we were at N500 billion of total debt, by march this year, we were at N345 billion and by September this year, we should be down to N150 billion maximum.

He added; “ Our focus is to continue on the export market so that we generate plenty of dollar which would help sustain our profit and provide us a better returns.”

On the company’s financial performance, Tinubu noted that the company was already in profitability considering its first quarter performance.

According to him,  the company’s profit after tax increase by 120 percent to N4.1 billion compared to loss after tax
of N20.9 billion in Q1 2015 figures.

Turnover, however, decreased by 34 per cent, from N64.0 billion to N97.1 billion during the same period last year.

Tinubu, said “This first quarter of 2016 demonstrates our dedication to return our business to profitability by the end of the 2016. We have implemented constructive corporate initiatives, which are driving forces for our business in this new global reality of economic restraint and lower
oil prices in our industry.

“The successful and ongoing implementation of these initiatives reiterates our strategy of growth, deleverage and a return to profitability by the end of 2016.

“As a group we have placed our focus on growing our upstream higher margined business while still holding fundamental interests in the midstream and downstream sectors. We look forward to a rewarding year, where we solidify our aspirations and return to profitability.”

He added that the Group successfully restructured its existing debt through a N94.6 billion Medium Term Note with a local consortium with lower interest rates and a renewed five-year tenor.