By Peter Egwuatu
Oando Plc has returned to profitability as it posted N3.5 billion Profit After Tax, PAT in the financial year ended December 31, 2016, representing a 107% increase from the loss of 2015.
A review of the company’s results further show positive performance across all financial indices, turnover increased by 49% to N569 billion from N382 billion in 2015, while Earning Before Interest, Tax Depreciation and Amortisation, EBITDA increased by 51% to N71.0 billion from N47.0 billion in 2015, boosting investors and shareholders confidence in the brand and its management team.
Commenting, Mr. Wale Tinubu, Group Chief Executive, Oando PLC said: “2016 saw the country plunge into a recession, the first in over two decades, besieged with liquidity constraints, devaluation of the naira and a slump in oil earnings due to low oil prices intensified by the insurgency in the Niger Delta.
We were proactive in the timely execution of our restructuring program of
Growth in our upstream division; deleverage, through divestments resulting in a net debt reduction of $125 billion; and Profitability by focusing on dollar denominated earnings.”
In the first quarter of 2016 the company successfully restructured its existing obligations through a N108 billion Medium Term facility with a syndicate of 9 leading local banks.
It also completed the full divestment of its Upstream Services business (Oando Energy Services) and the recapitalization of its downstream business to Helios Investment Partners, a premier Africa-focused private investment firm and the Vitol Group, the world’s largest independent trader of energy commodities to the tune of $210 million.
The recapitalization of Oando’s downstream operations represents the largest inflow of foreign capital in a single transaction in the oil and gas sector in 2016. This strategic initiative is positioned to revolutionize Nigeria’s downstream sector and create one of Africa’s largest downstream operations.
In furtherance of Oando being the partner of choice to foreign investors, the company concluded 2016 with the partial divestment of its midstream business, Oando Gas & Power Limited to Helios Investment Partners, a premier Africa-focused private investment firm for $115.8 million.
However, like many in the industry Oando’s numbers are still indicative of the economic headwinds, operational challenges and continued instability of global oil prices. An analysis of the full year 2016 results of oil and gas companies operating in Nigeria reveals a steady decline in earnings with ExxonMobil declaring $7.8bn in revenue, compared to $16.2bn in 2015. Royal Dutch Shell recorded its worst annual profit for more than a decade, the company posted fourth-quarter earnings of $1.0 billion, compared to $1.8 billion for the same quarter in 2015. The company further declared full year 2016 earnings of $3.5 billion compared to $3.8 billion in 2015.