By PETER EGWUATU

Shareholders have applauded Oando Plc’s recent diversified earnings following its integrated model approach adopted by its Board of Directors.

The model has enabled the company to diversify its income streams, leverage on opportunities that have arisen along their energy value chain.

The company’s turnover increased by12 per cent from N336.86billion in 2009 to N378.93 billion in 2010, and Profit-After-Tax also increased by 42 per cent from N10.10 billion in 2009 to N14.37 billion in 2010.

Earnings Before Interest Tax Depreciation and Amortization (EBITDA )was N30 billion as against N25.3 billion in 2009, representing an increase of 19 per cent.

Speaking to Vanguard on Oando’s performance for the financial year ended December 31, 2010, Sir Sunny Nwosu, National Coordinator of Independent Shareholders Association of Nigeria (ISAN) said: “ We are delighted at the impressive performance of our company.

We appreciate the N3 dividend that was paid to us as well as the bonus of one for four. Like Oliver Twist, we hope that we will get higher dividend come next year.”

He further commended the company’s strategy to lay more focus on the higher margin upstream sector.

*From left: Bolaji Osunsanya, MD/CEO, Oando Gas and Power, Robert Greenhill, MD/Chief Business Officer, World Economic Forum and Wale Tinubu, Group Chief Executive, Oando PLC having a conversation during the 2011 World Economic Forum on Africa in Cape Town, South Africa recently.

According to him, “ With this sector contributing immensely to our earnings, this underscores the resilience of our integrated business model, which leverages scales, diversity and market leadership to consistently deliver in the face of challenging operating environment.”

Chief Timothy Adesiyan, President, Nigerian Shareholders Solidarity Association (NSSA), in his comment commended the diversification strategy adopted by the Board of the company,saying it would yield greater dividend for shareholders.

According to him, “The diversification of its operations will create another opportunity for the shareholders to have multiple dividends as it gets prepared to diversify its 49 per cent of its wholly owned equities in the marketing arm.

“ We are also excited that Oando Plc, one of Nigeria’s largest integrated energy solutions company is set for robust performance on the back of its 128km South-East natural gas pipeline project which is expected to be completed before the end of the year.”

Vanguard gathered that the project which is managed by its midstream subsidiary, Oando Gas and Power (OG&P), will deliver 22 million standard cubic feet (mmscf) of gas, from the existing Obigbo-ALSCON line in Ukanafun, Akwa Ibom, to its foundation customer, United Cement Company (UNICEM), to fuel its new 2.5 million metric tonnes per annum plant, located in Calabar, Nigeria.

The strategy is also believed to offer long-term investment option through the company’s upstream business, Oando Plc, affording investors the opportunity to maximize risks through diversification.

Specifically, the group had diversified into the gas distribution business and has built a 100- kilometre pipeline in Lagos.

The company also moved into the upstream services business and has the largest swamp rig fleet company in Nigeria. The group’s exploration and production business is the first indigenous oil and gas company to have equity in a producing deep offshore asset.

These businesses have established the group in downstream, midstream and upstream of the oil industry.

Key industry operators observed that opportunities in the upstream business for indigenous companies opened up with the ongoing reforms in the industry.

The Petroleum Industry Bill (PIB), now in the National Assembly, is expected to give preference to Nigerian companies in buying into a substantial amount of proven reserves that have been held for 30-40 years by foreign oil companies and now have to be released.

Meanwhile, the Group Managing Director, Oando Plc, Mr.Wale Tinubu has said that during the year 2010 under review, the company witnessed an immense improvement in its financial results in comparison to 2009, thereby confirming a year of tremendous growth for the entity in line with the global economic recovery experienced since the downturn that began in 2007.”

Continuing, he said, “ Oando’s gas and power division has been a significant contributor to the group’s financial performance.

The business contributed N17.4 billion to the group’s turnover in 2010 and now set to up the ante with the consequent increase in market share from the gas pipeline.