Oando grew Q3 2016 revenue by 96% …As loss after tax drops by 25% to N35.9 bn

Oando Plc, Nigeria’s leading indigenous energy group listed on both the Nigerian and Johannesburg Stock Exchanges, announced unaudited results for the six months period ended 30 September, 2016, with the following highlights:
According to the result released by the Nigerian Stock Exchange (NSE) the company’s turnover increased by 26 per cent, to N330.0 billion compared to N262.0 billion recorded in the preceding period of 2015.
The Gross Profit decreased by 52 per cent to N28.7 billion compared to N60.0 billion posted in half year accounting period of 2015. Loss-After-Tax decreased by 25 per cent, (N35.9 billion) compared to N47.6 billion posted in Q2 2015.
The result was achieved under a volatile environment, occasioned by escalating exchange rate, challenged financial sector, uncertain sectoral regulation as well as the Niger Delta hostilities.” For the major part of the year we have faced operational challenges due to the unrest in the Niger Delta, the company noted.
Irrespective of the economic challenges, the company continues to brave the odds, as it recorded growth in top line revenue propelled by the new business model of a diversified business with higher weighted dollar earnings in both the Upstream and International Trading businesses.
This however drove its revenue up by 96 per cent and led to significant foreign exchange gains between the second and third quarters.
The company’s upstream operations’ performance showed that Oando Energy Resources (OER) during the nine months ended September 30, 2016 recorded a 20 per cent decrease in total production of 12.0 MMboe., representing an average 43,617 boe/day) compared to 15.1 MMboe average 55,154 boe/day recorded in comparative period of 2015.
The company’s mainstream operations during the period recorded a major transaction as Oando Plc signed definite agreement to divest 49 per cent voting rights in Oando Gas & Power (OGP) to Helios Investment Partners for $115.8 million
The Oando Gas and Power (OGP) throughput volume decreased by 31 per cent to 43 mmscf/day in the nine months ended September 30, 2016, this was against 62 mmscf/day in the comparative period of 2015
The OGP Achieved 59 per cent Completion in Central Horizon Gas Company (CHGC) Pipeline Expansion Project, also it achieved 93 per cent completion in Greater Lagos 4 Project
The company’s downstream operations during the accounting period recorded significant growth through impact of export of Nigerian crude and petroleum products. The report showed that over 11Mb of Crude Oil, 213,000 MT of refined petroleum products have been exported YTD.
Group Chief Executive, Oando PLC Mr. Wale Tinubu, said that the third quarter witnessed the FGN’s establishment of a ceasefire with the militants responsible for production disruptions in the Niger Delta, leading to stabilized daily productions from the company’s assets and expectations of imminent increases to its 2015 production highs of 56kbbls/day.
He said that Oando has been proactive in its cost management initiative to ensure maximized value extraction for every barrel of oil produced as the global oil price still lingers below $50/bbl. “We are pleased to have executed a SPA with Helios Investment partners for ~$116 million, representing 49% legal voting rights in the company’s midstream business, of which the proceeds of the divestment will be utilized towards the company’s debt restructuring initiative” Tinubu said.
According to the Group CEO, the group business has grown significantly this year having exported over 11 cargoes of crude with volumes exceeding 11mmbbls and an additional 31 cargoes of other oil based products year to date.
“Our business model of dollar denominated earnings is taking shape as evidenced from the increased revenue line (95% increase) and future increases from the Upstream business through increased daily production rates and export trading businesses through increased lifting’s, with a focus to return our business to profitability by year end.” He said.