Thursday,
November 2, 2017 7:30 AM / NSE
Oando PLC (referred to as
“Oando” or the “Group”), Nigeria’s leading indigenous energy group listed on
both the Nigerian and Johannesburg Stock Exchange, today announces unaudited
results for the nine months period ended 30 September, 2017, with the following
highlights:
Commenting on the
results Wale Tinubu, Group Chief Executive, Oando PLC said:
“Our third-quarter financials
are reflective of the success of our strategic initiatives of Growth through
our dollar earning upstream portfolio; Deleverage through recapitalization and
asset divestments and the expansion of our oil export trading business. The
proceeds from our business restructuring have been successfully used in
improving our balance sheet with a reduction of N21 billion in our net debt
position from N230.6 billion as at December 2016 to N209 billion today. Despite
prevailing headwinds, we continue to create value as seen in our improved
performance four quarters in a row and remain confident about the resilience of
our business model.’’
Financial
Highlights:
Turnover increased by 16%,
N383.5 billion compared to N329.9 billion (Q3 2016)
Gross Profit increased by 148%,
N71.2 billion compared to N28.6 billion (Q3 2016)
Profit-After-Tax increased by
120%, N7.1 billion compared to (N35.8 billion) (Q3 2016)
Operational
Highlights:
Upstream:
Oando Energy Resources (OER)
recorded an average production of 39,844 boe/day in the nine months ended
September 30, 2017 compared to 43,617 boe/day in the comparative period of 2016
Realized a net income of N26.97
billion ($88.2 million) compared with a net profit of N2.51 billion ($8.2
million) recorded in the comparative period of 2016
Midstream:
Oando Gas & Power (OGP) was
rebranded to Axxela
Appointed as a shipper on the
West Africa Gas Pipeline
Successfully achieved
completion of Greater Lagos IV (GLIV) pipeline expansion project
Downstream:
Oando Trading (OTD) recorded a
48% increase in turnover to N305.75 billion ($1 billion) compared to N206.69
billion ($676 million) in the comparative period of 2016
Traded over 11 million bbls
Crude Oil volumes and 800,000MT of Refined Petroleum Products, a 25% growth in
traded volumes
The Lagos Marine Jetty (LMJ)
officially commenced operations receiving its first product vessel
The fourth quarter presents an
optimistic outlook for the Nigerian oil and gas sector having experienced a
third quarter characterized by an oil price increase of 14% from July to
September 2017 compared to the same period in 2016. The country also officially
exited a 13 month long recession with a positive Gross Domestic Product (GDP)
growth of 0.55% in the second quarter of 2017 buoyed by OPEC’s cut in oil
production and exemption of Nigeria from the production cut, stability in oil
prices and a boost in the nation’s oil production due to the ongoing truce with
Niger Delta militants.
Operational
Update:
Upstream:
Oando Energy Resources (OER)
recorded an average production of 39,844 boe/day in the nine months ended
September 30, 2017 compared to 43,617 boe/day in the comparative period of
2016. This was primarily due to significant reductions in gas production and
delivery caused by a ruptured Gas Transmission System (GTS-4) gas line which
supplies gas to the Nigerian Liquefied Natural Gas Limited (NLNG). Downtime
suffered by the Trans Forcados pipeline led to repairs and planned maintenance
activities that resulted in
reduced production from Ebendo (OML 56)
OER recorded a net income of
N26.97 billion ($88.2 million) compared with N2.51 billion ($8.2 million) in
the comparative period of 2016. The increase in profitability was primarily due
to improved revenue from the sale of OML 125 & 134, lower production expenses,
reduction in depreciation and net losses on financial instruments which were
offset by lower tax recoveries
Midstream:
Following the partial
divestment of our midstream subsidiary Oando Gas & Power (OGP) to Helios
Investment Partners, a premier Africa-focused private investment firm, OGP
changed its corporate identity and rebranded to Axxela Limited
Axxela was appointed as a
shipper on the West Africa Gas Pipeline positioning the Company to supply gas
along the West coast
Axxela also completed the
Greater Lagos IV (GLIV) 12 inches x 9km pipeline expansion network from Ijora
through Lagos Island to Bonny Camp, Victoria Island creating an opportunity for
the Company to increase its current 175 customer base by supplying gas to
industrial customers looking to for alternative, cheaper and more efficient
power sources
Downstream:
Oando Trading (OTD) witnessed a
25% growth in traded volumes year-on-year, led by a solid increase in Crude Oil
trading activity whilst turnover grew by a creditable 48% to N305.75 billion
($1 billion) compared to N206.69 billion ($676 million) in the comparative
period of 2016. This is as a result of improved activity and oil price
recovery. Year-to-date Crude Oil volumes have exceeded 11 million bbls, while
over 800,000 MT of Refined Petroleum Products were traded within the same
period
OTD continues to solidify its
relationships with key leading International and African banks, securing access
to over N215.4 billion ($700 million) of immediately available Structured Trade
Finance facilities, enabling the Company to achieve greater trading capacity
and in turn, more volumes
The Lagos Marine Jetty (LMJ)
and petroleum off-loading facility, officially commenced operations receiving
its first product vessel on the 31st of May 2017; to date it has received a
total of 10 vessels. This novel infrastructure will provide substantial savings
estimated at over $120 million annually to product importers and the country as
a whole
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