By Goddy EgeneÂ
Oando Plc has consolidated on its 2016 gains by recording a higher profit for the year ended December 31, 2017.Â Â The indigenous integrated energy companyÂ on Fridayannounced its audited results for 2017, showing revenue of N497.422 billion, compared with N455.746 billion in 2016.
The company reduced cost of sales from N426.99 billion to N409.341 billion in 2017. Also, administrative expenses declined from N109 billion to N77.89 billion, while net finance cost reducedÂ Â Â Â from N51 billion in 2016 to N33.78 billion in 2017. Consequently, profit after tax soared from N3.913 billion to N19.77 billion in 2017, showing an increase of 405 per cent. Oando Plcâ€™ s netÂ debt reduced to N217.1 billion from N230.6 in the comparative period of 2016.
Commenting on the performance, the Group Chief Executive of Oando,Â Â Wale Tinubu said: â€œThe business recorded a year-end profit of N19.8 billion, a culmination of fourÂ Â consecutive quarters of positive results, validating our promise to shareholders of returning to and maintaining profitability. This comes in the wake of oil prices on an upward trajectory, an improved operating environment, the exit of a 13 month long recession and most importantly the continued strengthening of our business model through the effective implementation of our strategic initiatives of growth through our dollar earning upstream portfolio; deleverage through asset divestments and the expansion of our oil export trading business.â€
He added that despite the challenges the company experienced in 2017, Oando recorded some operational highlights.
Tinubu said: â€œIn the upstream sector, Oando recorded an average production of 40,188 boe/day in the 12 months ended December 31, 2017 compared to 43,503 boe/day in the comparative period of 2016. This was primarily due to significant reductions in gas production and delivery caused by the rupturing of Gas Transmission System (GTS-4) gas line and pipeline and terminal constraints at its OMLs 60 to 63.Â Â The upstream business recorded a net profit of N26.33 billion ($86.1 million) compared with N91.83million ($0.3 million) in the comparative period of 2016. This increase in profitability was primarily due to improved revenue between the periods, and increase in gains on financial instruments which were offset by lower tax recoveries.â€
Â He explainedÂ Â that in the midstream, Oandoâ€™s affiliate, Axxela, recorded an 11 per centÂ Â increase in natural gas deliveries in 2017. This achievement, accordingÂ Â to the company,Â Â was in spite of restricted gas supply in H1 2017 due to the sabotage of upstream gas supply facilities by militants.Â
â€œThe construction of Phase IV of the pipeline network in the Greater Lagos Industrial Area and the Central Horizon Expansion Pipeline in Port Harcourt were successfully completed. These projects expanded the firmâ€™s distribution infrastructure and enabled it reach a wider demand area for delivery of gas, consequently increasing its customer base to 175 customers,â€ he said.