The board of Oando plc., yesterday, reported 73 percent increase in first quarter profit for the period ended March 31, 2010. The company in a statement to the Nigerian Stock Exchange (NSE) announced that profit after tax stood at N3.1 billion during the quarter.
In the same vein, pre-tax profit grew 109 percent to N5.1 billion in 2009 and turnover increased by 18 percent to N91.3 billion. Investors promptly reacted to the result, leading to an increase of 5 percent or N2.30 in Oando’s share price from N113 to close N115.30.The directors stated that the strength of the Q1 performance reflected the energy group’s increasing contributions from the diversified platform coupled with the satisfactory financial performance of the base downstream business.
“The midstream businesses generated new revenues from its first IPP, the recently commissioned 12.15MW independent power plant for the Lagos State Water Corporation; The upstream businesses deployed a second swamp drilling rig to commence a contract with an International Oil Company; and increased crude oil production from producing assets. The downstream division received delayed Petroleum Subsidy Fund (PSF) payments from the Petroleum Products Pricing Regulatory Authority (PPPRA) which significantly contributed to its liquidity and resulted in more manageable interest cost.”
Commenting on the result, Wale Tinubu, chief executive officer of Oando said, “I am happy to announce a positive start to the year. The first quarter’s success is attributable to the increase in earnings from the midstream and upstream businesses as new project initiatives continue to come on stream. Furthermore, our downstream business has performed creditably in line with our financial expectations.”
According to Tinubu, “the quarter was heralded by our launch of a major capital market transaction - a Rights Issue exercise which received overwhelming support from our shareholders and achieved a 28 percent oversubscription, the most successful in recent times. Our Gas and Power business commissioned its first captive power plant for Lagos State Water Corporation, and in so doing, substantially reduced their operational costs. Furthermore, the project has major social consequences, as clean potable water throughput has increased by 300 percent. Our Energy Service business deployed an additional swamp rig to commence operations with a major International Oil Company and our Exploration and Production business also increased production from our producing Oil and Gas assets.”
Directors are of the view that 2010 promises to be a year of tremendous growth for the company. “In the downstream, our ability to substantially increase revenue has been assured by the introduction of the Sovereign Debt Note Program which guarantees all Petroleum Subsidy Fund (PSF) payables. In the upstream, the local content policy initiative promotes indigenous companies”.