Leading integrated indigenous oil and gas company Oando Plc has posted a profit after tax of N7.1 billion in the third quarter of 2017, boosting shareholders’ confidence in the stock.
A comparative review of Oando’s financials shows positive performance across all indices. Turnover increased by 16 per cent to N383.5 billion from N329.9 billion in the same quarter of 2016 and gross profit increased by 148 per cent to N71.2 billion from N28.6 billion. Profit-after-tax increased by 120 per cent to N7.1 billion from a loss of N35.8 billion in Q3 2016.
Commenting on the results, Group Chief Executive Wale Tinubu, said: “After five consecutive quarters of contraction, Nigeria’s official exit from the recession, buoyed by improved performance in the oil, agriculture, manufacturing and trade sectors of the economy, is laudable news. The continued increase in oil prices to a 2017 high of $58 in September, coupled with ongoing peace efforts in the Niger Delta have significantly impacted our fourth successive profit declaration.”
The management said it continues to keep to the promise it made to shareholders during its 39th annual general meeting in 2016 with the declaration of its fourth consecutive profit. The company was proactive in its approach to cushion the effect of the oil downturn by immediately implementing its strategic growth initiatives.
Tinubu added: “Our third quarter financials are reflective of the continued implementation of our strategic initiatives of growth through our dollar earning upstream portfolio; deleverage through recapitalisation and asset divestments and the expansion of our oil export trading business. The proceeds from our business restructuring and asset sales have been successfully used to improve our balance sheet with a reduction of N18 billion in our debt position from N247 billion as at December 2016 to N229 billion today.”
Oando’s results defy the speculation of many who watched the company and its management come under scrutiny in the past months. It also comes as a relief to aggrieved shareholders who have in the past months expressed their dissatisfaction on the damage the Security Exchange Commission probe caused to brand value and the Company’s share price, the management said.
However, these results prove the company can look forward to an optimistic future. In 2015 Oando concluded the recapitalization of its downstream business with a consortium of Helios Investment and Vitol Group for US$210 million. The partnership reinvigorated Nigeria’s downstream sector to create one of Africa’s largest downstream operations. Oando further divested its midstream business now known as Axxela to Helios partners for US$115.8 million to increase its gas footprint, the management added.
“Our tenacity to continuously create value despite prevailing headwinds is evident in our improved performance four quarters in a row; we remain optimistic about our future performance and focused on delivering robust returns to shareholders,” Tinubu said.
