Friday, October 23, 2015 5:22 PM / Research
Numbers don’t lie. Obviously, the business of OANDO is not profitable for now, while the outlook indicates that the shareholders have been raped (un)knowingly if we are to go by performance of the bottom-line in the last six (6) quarters. And most likely, things are likely to be worse than projected by the recent figures released while we advise a cautious trading of shares.
Apart from the poor numbers, we are less impressed with the constant unethical pattern employed/deployed by the firm in releasing its earnings reports in the recent years- this questions its corporate governance integrity.
We are of the opinion that delaying audited reports for 10months is like infringing on the rights of investors and breaching the mutual contract with the investing community at large- we remain worried why SEC and NSE treated this unethical act with less sense of responsibility. This may continue to weigh on or deplete the feeble investors’ confidence in our opinion.
Oando declared a loss of N183.89billion, representing 13264.19% (YoY) decline for the 2014 financial year(FY’14). We observed a sustained decline in PAT performance since Q1'14 with bleak or no light at the end of the tunnel as bottom-line of the Oil Giant fell further by -67.55%(QoQ) and -491.16% (YoY) respectively. See latest result released
On a similar note, an extensive analysis of the top-line performance suggested that the firm is losing its market share within the industry as its revenue base shrunk from N449.87billion recorded at end of FY'13 to close at N60.31billion at end of Q2'15, representing -86.59% fall in revenue base in the last six quarters.
The operating strategy of the firm appeared to have failed the shareholders woefully- we remain concerned as the aggressive expansion has not translated into growth for shareholders. Analysis revealed that the shareholders fund had depleted by -56.76% within the same six quarters period. The shareholders fund closed at N70.21billion in Q2'15 against N162.34billion recorded in FY'13, which further buttress our position on its shrinking market share.
Conclusively, the unimpressive posture of the net finance income for periods of Q4'14, Q1'15 and Q2'15 points to huge debt profile of the firm. The net finance income recorded negative growth of -98.56% -132.64% and -91.73% for three quarters respectively. Also the finance cost growth closed at 79.27%, 117.65% and 100.81% for the same periods respectively
1. OANDO Releases Q4'14, Q1'15 and Q2'15 Results, Declares N35.13bn Loss in Q2,(SP:N10.14k)
2. OANDO Descending triangle has been formed
3. OANDO attracts hunters tops market as price pulls back from new low
4. OANDO Finally stock has bottomed out let s buy it.
5. OANDO snaps 19wks sell-off gains 10.16 to lead market
6. OANDO Accumulation is possible with potential double bottom