Oando Performance Surges Following Successful Completion Of Strategic Initiatives
Stocks hit a four-month high earlier this week, lifted by gains in Oando Plc, and improved investor sentiment towards the country’s recession-hit economy.
Oando’s return to profitability and increase in share price is indicative of the successful implementation of its corporate initiatives focused on Growth across its operations; Deleverage via the divestment of non-performing assets; and Profitability, by focusing on dollar-denominated export earnings.
Speaking at the company’s Facts Behind the Figures on the Nigerian Stock Exchange (NSE) held in Lagos, the group chief executive of Oando, Wale Tinubu said, “The challenge we faced was the economic and sector downturn, we came clean to the market, created a five point plan and successfully delivered on every part of that plan.”
The company deleveraged its balance sheet through the divestment of its upstream services company Oando Energy Services and embarked on the expansion of its retail and gas footprint through a strategic partnership with Helios Investment Partners and Vitol Group to recapitalize its downstream business for $210 million and the $115.8 equity buy-in of its Gas and Power business by Helios Investment Partners.
Oando acquired a N108 billion medium term loan with 11 Nigerian banks, this medium term five years consolidated facility, with a three year moratorium on principal, enabled the overall restructure of the Group’s obligations.
Today, Oando’s borrowings have significantly reduced by 29 per cent to N225.9 billion in the first quarter of 2017 from N355.4 billion in the first quarter of 2016 and its year to year return increased by 103.62 per cent compared to the comparative period in 2016, quelling concerns of critics.
The successful deployment of the company’s five-pronged strategy is evident in its full year 2016 results with a N3.5 billion profit-after-tax, a 107 per cent increase from the loss of full year, 2015.
A review of Oando’s results further show positive performance across all financial indices, turnover increased by 49 per cent to N569 billion from N382 billion in 2015, while EBITDA increased by 51 per cent to N71.0 billion from N47.0 billion in 2015, boosting investors and shareholders confidence in the company and its management team.
In first quarter, 2017, Oando’s turnover grew by 116 per cent to N138.4 billion and gross profit by 53 per cent to N13.4 billion compared to the first quarter of 2016. Profit before tax increased by 207 per cent to N494 million compared while profit after tax decreased by 58 per cent to N1.7 billion compared to N4.1 billion in first quarter, 2016.
“The first quarter earnings underscore our proactive decision to focus on our dollar denominated export businesses. Our resilience is evident in our capacity to grow via a diversified model, and as we continue to chart our deliberate path in this challenging business environment, we look forward to better performance in the quarters to come,” said Tinubu.
According to Tinubu, the plan is to go from 60,000boedp by the last quarter 2017 to 80,000 in 2018 and hopefully 100,000 by 2020.
We also got approval from the president to repair, operate and maintain the Port-Harcourt refinery together with our partner Agip. We plan to increase the refinery capacity from 30 per cent to a 100 per cent, subsequently to 120 per cent.