Oando PLC has announced a net profit of N8, 980,019 billion for the first half of the 2014 financial year.
Listed on both the Nigeria Stock Exchange (NSE) and Johannesburg Stock Exchange (JSE), Oando is one of Nigeria’s leading indigenous oil and gas producers.
The half year 2014 result which was released on the floor of the Nigerian Stock Exchange (NSE) shows that the company posted an impressive N24 billion operation profit and an N9billion profit after tax, a 145 per cent and 110 per cent increase from first half of 2013 respectively.
The company is also paying a dividend of N1 per share based on a 2013 dividend of 30 kobo and 2014 proposed interim dividend of 70 kobo.
These impressive results indicate the company is beginning to reap the rewards of its landmark $1.5 billion acquisition of ConocoPhillips entire Nigerian business, which has transformed its status into Nigeria’s largest indigenous oil and gas producer.
With the acquisition now complete and immediately cash generative the company’s upstream subsidiary, Oando Energy Resources has a total hydrocarbon production capacity of approximately 45,000 boe/d, 2P Reserves of 230.6MMboe and 2C Resources of 547MMboe, and expects annual revenue of over $600 million, and annual free cash flows of $150 million.
Commenting on the results, Oando Group Chief Executive, Wale Tinubu said, “Our strategic refocus on the higher margin Upstream foresees immense value add for our stakeholders in the near term. We have succeeded in repositioning ourselves within the sector, and through future acquisitions and innovative efficacy we will seek to up our market share in sub-Sahara’s upstream sector within the next five years to 100,000 boe/d in net production.
However, Oando has also made significant progress in extracting value from its legacy assets.
Tinubu said, its OML 125 production increased by 17per cent to 651,000 bbls, while OML 56 production increased by 30 per cent to 171,000bbls compared to last year, significantly impacting on revenue and profit streams.
The company’s midstream business, Oando Gas and Power is currently undergoing an extension of its natural gas distribution network by 8km from Ijora to the Marina business district in Lagos state, positioning the company to benefit from the growing demand for gas and power infrastructure in the country.
In the downstream, the company recently completed construction of the Apapa Single Point Mooring (ASPM) Jetty, a first in Africa. The project is expected to improve overall downstream efficiency through cost savings on imports and the elimination of the current high cost of lightering and demurrage. The cost saving across the industry is estimated to be in excess of $120 million per annum.
Also released was the company’s end of year statement for 2013, which shows the company posted a N1.4 billion profit.This was greatly attributed to the acquisition cost and interest on debt facilities in Oando’s prolonged acquisition of ConocoPhillips Nigeria business assets.
In the first half of 2014, the group has already seen positive indications from its active strategic initiatives; upstream investments, midstream expansion and downstream optimisation. Based on its second quarter 2014 performance, it is likely to exist the year with a N24 billion profit.