April 1, 2019
By InvestAdvocate
Lagos (INVESTADVOCATE)-Oil marketing firm, Oando Plc said on Monday its profit for the year ended December 31, 2018 rose 45.64 percent to N28.79 billion from N19.77 billion declared a year ago.
Profit before tax (PBT) of the company declined -46.12 percent to N11.18 billion from N20.76 billion posted the same period of 2017.
Revenue of Oando grew from N497.42 billion in 2017 end to N679.46 billion in the review period of 2018; indicating a growth of 36.60 percent, according to the oil marketing major in a filing with the Nigerian Stock Exchange (NSE).
A statement from the company and made available to InvestAdvocate says gross profit for the period was N96.3 billion, an increase of 9 percent compared to the same period in 2017 (N88.1 billion). “The increase is primarily driven by higher revenue as a result of higher commodity prices and higher oil production,” the statement said.
Commenting on the results Wale Tinubu, Group Chief Executive, Oando Plc said:
“Our 2018 results demonstrate the solid foundation we have built across volatile commodity price cycles, and our ability to deliver profitability despite a challenging local operating environment. Over the last few years, we have developed a reliable platform for future growth through the execution of a corporate strategy designed to streamline our operations, reduce our debt and optimize our asset portfolio. Our asset base is delivering strong free cash flows as evidenced by a 70% reduction in our Upstream Borrowings since the closure of our landmark acquisition of ConocoPhillips’s Nigerian asset in 2014. We remain confident in our ability to deliver significant value to shareholders in the years ahead as well as resuming our dividend payments”.
According to the oil marketing major, during the twelve months ended December 31, 2018, production was in line with prior year at 40,023boe/day, compared with 40,188boe/day in the same period of 2017. Oil production in particular increased by 10% from 15,492bbls/day in 2017 to 16,967bbls/day in 2018.
“Working interest 2P Reserves, as assessed by an independent reserves evaluator, stood at 479.8mmboe as at December 31, 2018 compared to 470.7mmboe in the comparative prior year period. This represents an increase in overall 2P reserves of 2% year on year in line with the Group’s reserve replacement ratio,” the company added.
In 2018, Oando disclosed it traded over 14 million barrels of crude oil under various contracts with the Nigerian National Petroleum Corporation (NNPC) as well as delivering 739,876 MT of refined products, acting as a key source of liquidity to the Oando Group. Oando Trading continues to solidify its relationships with leading international and local banks, maintaining a sizeable and well diversified structured Trade Finance facilities required to support future growth.
The oil marketing major said the Brent averaged $62 per barrel in the first quarter of 2019, with room for a further upside supported by OPEC’s 1.2 million b/d cut. “Our upstream business will continue to pursue production growth initiatives through strategic alliances, whilst ensuring operational efficiency and fiscal prudence,” Oando added.
“Our Trading business will continue to solidify its position in Nigeria and carry out growth initiatives, whilst exploring opportunities for expansion across Africa.
The Group as a whole remains focused on driving profitability via growth in our upstream business and achieving further reduction of borrowings to ensure value accretion to shareholders,” the statement affirmed.
