Mr. Wale Tinubu, CEO, Oando

Goddy Egene

Integrated energy group, Oando Plc, has reported a gross profit of N50.66 billion for the nine months ended September 30, 2012.

The unaudited result of the company, made available to capital market operators, showed a turnover of N487.77 billion in 2012, up from N392.304 billion in the corresponding period of 2011.

Gross profit rose by 11 per cent from N45.54 billion to N50.66 billion in 2012, while profit after tax stood at N9.2 billion in 2012, compared with N8.686 billion in 2011. Earnings per share improved from 384 kobo to 404 kobo.

Commenting on the result, analysts at FBN Capital Limited said that the performance showed strong year-on-year growth in headline profits across the board. According to them, the trend in Oando’s results showed that the diversification away from downstream oil and gas is progressing.

They noted that Oando’s interest burden was significantly lower than what they saw in the first half (H1) of the year. “If Oando can keep its interest burden close to what was reported in Q3, that should boost earnings going forward,” the analysts said.

As part of efforts to reduce the interest burden, Oando Plc is planning a fresh  Rights Issue  to raise N35 billion. 

Commenting on the Rights Issue recently, Group Chief Executive, Oando Plc, Mr. Wale Tinubu, said: “Our last capital raise, was a N21 billion Rights Issue exercise in 2010 during the economic downturn.

The exercise was a great success and was oversubscribed by 28 per cent. In today’s challenging conditions in the downstream sector, we are enhancing our capital structure and reducing our debt to better position the Group to execute its Exploration and Production growth strategy. We look forward to a similar outing and outcome with the closure of this process.”

Meanwhile, the stock market closed weaker Tuesday as the Nigerian Stock Exchange (NSE) All-Share Index fell by 0.9 per cent to close at 26,739.22, compared with a growth the previous day.