Oando Posts 26% Growth in Turnover, Reduces Loss to N35.9bn

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Oando Plc monday announced a growth of 26 per cent in revenue to N330 billion for the nine months ended September 30, 2016, from N262 billion in the corresponding period of 2015. However, the company ended the period with a loss of N35.886 billion, which is lower than the loss of N47.631 billion in the corresponding period of 2015.

Commenting on the results, Group Chief Executive, Oando Plc, Mr. Wale Tinubu, said: “The third quarter witnessed the Federal Government of Nigeria establish a ceasefire with the militants responsible for production disruptions in the Niger Delta, leading to stabilised daily productions from our assets and expectations of imminent increases to our 2015 production highs of 56kbbls/day. We have also been proactive in our cost management initiative to ensure maximised value extraction for every barrel of oil produced as the global oil price still lingers below $50/bbl. We are pleased to have executed a sales and purchase agreement (SPA) with Helios Investment partners for $116 million, representing 49 per cent legal voting rights in the company’s midstream business, of which the proceeds of the divestment will be utilised towards the company’s debt restructuring initiative. Our trading business has grown significantly this year having exported over 11 cargoes of crude with volumes exceeding 11mmbbls and an additional 31 cargoes of other oil based products year to date.

Our business model of dollar denominated earnings is taking shape as evidenced from the increased revenue line (95% increase) and future increases from the Upstream business through increased daily production rates and export trading businesses through increased lifting’s, with a focus to return our business to profitability by year end.”

Market analysts have said that the slump in global oil prices continues to have far-reaching implications on indigenous companies such as Oando. In Nigeria, oil companies are faced with an even more challenging environment including; production disruptions by militant activities in the Niger Delta. Oando witnessed a 22.7 per cent decrease in oil production from 53,169 boe/day in Q3, 2015 to 41,094 boe/day in Q3, 2016. Seplat Nigeria recorded a N24.1 billion loss in Q3, 2016 while Exxon Mobil reported a 38 per cent drop in quarterly profit and a three per cent fall in production as a result of production disruption by militants in the Niger Delta.