Oando posts N8.5b profit in H1 2018

Oando Plc has reported a N8.5 billion profit-after-tax (PAT) for the half-year ended June 30, 2018, attributing the performance to increase in oil and gas commodities prices.

The company admitted that the fall in oil prices in the past affected its revenues, which ultimately led to its reported losses.

However, in a statement yesterday, Oando said it had since actively worked toward reversing its fortunes, while reminding its shareholders that an investment in the company will ultimately pay off.

With its H1 2018 results the company has posted its seventh quarter consecutive profit.

Its turnover grew by 11 per cent to N297.3b from N267b (H1 2017); gross profit increased by 53 per cent to N51b compared to N33.4b (H1 2017); and profit-after-tax increased by 86 per cent to N8.5b compared to N4.6b (H1 2017).

Oando recorded a net profit of N27.1b ($75.2m) compared with N16.3b ($53.2m) in the comparative period of H1 2017 in its upstream business.

The increase in net income between the quarters, it explained, was primarily due to higher revenues resulting from general increase in the price of oil and gas commodities.

It picked up on the industry recovery witnessed in 2017. Brent prices averaged $69.87 per barrel, resulting in a 38 per cent increase in realised crude price compared with 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, the statement added.

Commenting on the results, Group Chief Executive, 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.”

The company said its performance in the first half of 2018 was a continuation of the strong financial performance delivered last year and in the first quarter of 2018, as Oando continued to increase its market share in the downstream sector through its trading business, Oando Trading (OTD).

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 metric tons of petroleum products traded in the first half of the year.

Speaking on the results, an Oando shareholder with the Sokoto Zone Shareholders Association, Kabiru Tambari, said: “This results reaffirm my commitment for the management of Oando. Seven profits in a row is no mean feat.”