Oando Set for Higher Dividend Declaration

Oando Set for Higher Dividend Declaration

 

Investors in Oando Plc, Nigeria's leading integrated energy company, will smile soon as strong indications have emerged that the company’s Board is set to recommend a robust dividend for the year ended December 31, 2009.

 

 

Oando Plc had paid a dividend of N6 per share for its 2008 financial year. Competent market sources said that given the improved performance of the company in 2009, the directors, which are  expected to meet today, will recommend a higher dividend.The company reported a net profit of N6.64 billion for the third quarter of 2009, compared with N5.56 billion in the corresponding period of 2008. The Group Chief Executive of Oando Plc, Mr. Wale Tinubu, had explained that the results for third quarter 2009 once again underscored the robustness of the business.

 

 

He said: “Through prudent resource management and consistent value creation, we have maintained market leadership in spite of the harsh operating environment created by the global economic crisis, the effects of banking sector reforms and the persistent uncertainties over deregulation of the petroleum industry.”Analysts had said that  Oando's  earnings would be boosted by its high diversification, which has  expanded its stream of income.According to sources,  apart from ending the 2009 with an impressive performance, the 2010 financial year has better outlook  as new projects executed are expected to add  to its income.

 

 

“The recent   capital raising exercise will help in boosting the company's bottom line because  the funds would be used to refinance some of the expansion and reduce dependence on bank  borrowings with their  resultant costs. From all indications, the Rights Issue was well received and by the time the proceeds are  utilised, investors would  smile on the long-run,” a  market source said.

 

 

A stockbroker said that the current share price of Oando Plc is a very good opportunity for investors to buy into the company and await the dividend declaration. The share price has slumped by about 14 per cent since when the technical suspension was lifted last week  from N93.99 to N80.60 as at last Monday.“However, the  low price is offering a new buy opportunity to come in because when the audited results for 2009 are released  and dividend announced, it will lead to a very good dividend yield and considering some of the new projects  executed by the company, the future is very bright,” a stockbroker said.

 

 

One of the projects expected to enhance Oando Plc's earnings is the  Independent Power Plant (IPP), Akute Power, which is to supply stable electricity to the Lagos Water Corporation (LWC). The 12.15 megawatt plant will power LWC's main water intake facility, including two other facilities with a combined installed capacity of 125 million gallons of water per day. The $25.5 million project was finance by Fidelity Bank.In ensuring smooth project delivery, Oando mobilised local and international resources with Clark Energy - a leading UK energy company- providing the reliable General Electric Jenbacher natural gas engine generator packages.


(Source:ThisDay)


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