Operators in the Nigerian stock market has commended the management of Oando Plc for the impressive third quarter performance in which it posted a Profit After Tax (PAT) of N8.8 billion, saying the result is expected to propel the share price upward at the secondary market.
Oando’s share price at the Nigerian Stock Exchange (NSE) currently ranked top four in the Petroleum Marketing sub sector.
The share price gained about 0.25 per cent from N66.75 per share between November 12, 2010 and November 19, 2010, a development stockbrokers remarked as indicative of the impressive third quarter unaudited results.
Stockbrokers had opined that the company is expected to post higher profit and turnover in the fourth quarter as has been its tradition over the years. This, they attributed to the increase in the expenditure pattern of the Nigerian people especially during yuletide period.
Currently leading the share price is Total Nigeria Plc, closing last week Thursday at N214.62 per share, followed by Mobil Oil Nigeria at N152.50 per share. MRS Oil Nigeria Plc occupied the third position with a share price of N 73.74 per share, followed by Oando Plc with a share price of N67.00 per share, while Conoil Plc followed with a share price of N36.63 per share.
According to Oando’s third quarter unaudited results ended September 30, 2010 released on the Nigerian Stock Exchange (NSE), the company’s PAT grew by 31 per cent when compared to the same period in 2009 in which it recorded N6.7 billion.
Gross profit grew by 63 per cent from N9.3billion for the corresponding period in 2009 to N15.18billion in 2010. Turnover grew by 10 per cent from N252.8billion for the corresponding period in 2009 to N277.5billion in 2010.
The company’s operating highlight show that its second rig commenced drilling contract with an International Oil Company (IOC). It successfully completed its rental agreements for an additional rig to commence operations with another IOC. There has been spudding and drilling of additional well on the Abo Field in OML 125 and construction work at Eastern Horizon Gas Company Limited’s 128km pipeline project is ongoing
Commenting, Wale Tinubu, Group Chief Executive, Oando PLC said, “We are pleased to announce our financial performance for the nine month period ended 30 September, 2010 which reflects an overall improvement from our business divisions.
In this period, our upstream division commenced preparations for the development of the Akepo field (OML 90) and look forward to production in the second quarter (Q2) 2011, we also embarked on the refurbishment of our third rig, which will be deployed in Q2 2011; in the Midstream, revenue generation increased due to the additional connects on our gas pipeline network, with cumulative connects now at 109 customers; the Downstream division led the market in distribution and importation of petroleum products.
“For the last quarter of the year, we continue to focus on operational excellence in a bid to drive margins. In the upstream, we have commenced exploratory drilling on OML 134 and look forward to reserves growth, we will also conclude on refurbishment plans for our fourth rig.
Construction continues on our midstream asset, the 128km south_eastern gas pipeline with completion expected early in 2011, thereafter we look forward to executing an additional gas pipeline franchise. The Downstream division will be partially divested and listed as a new entrant on the Nigerian Stock Exchange as a pure play petroleum marketing company in the near future.
Barring unforeseen circumstances, we expect a stable outlook for the rest of the year and look forward to an exciting year end”.
Meanwhile, it will be recalled that the company recorded PBT of N10.8 billion for the half year ended June 30,2010, representing an increase of 105.50 per cent from the same corresponding year, 2009. The company recorded a turnover of turnover N172,859 billion against N165,036 billion for the half year ended 2009. This represents a growth of 4.74 per cent.
The Group PAT grew p by 73 per cent to N6.6 billion with turnover rising by 5 per cent to N172.9 billion.
Other financial performance under the period in question had shown that company recorded a net profit of N6.6 billion, representing 73 per cent growth.
According to Sir, Sunny Nwosu, National Chairman, Independent Shareholders Association of Nigeria (ISAN) who spoke the minds of his members said, “Oando’s second and first quarter results ,2010 came in quite strongly.