Oando Plc has raised investors’ hope for better returns as it posted improved results for the first quarter (Q1) ended March 31, 2019.
The company, which recorded higher profit in 2018 sustained the positive performance in Q1, posting a revenue of N168 billion, up by 12 per cent from N150.6 billion posted in the corresponding period of 2018. Profit-after-tax increased by 11 per cent to N4.6 billion compared with N4.2 billion in Q1 2018. The Group also decreased its total borrowings by five per cent to N200.9 billion compared to N210.9 billion in 2018 while its long term borrowing decreased to N75.8 billion compared to N76.8 billion.
Also, the figures reflected an increase in production by 11 per cent at 43,745boe/day compared to 39,556boe/day in the same period of 2018 in Oando’s upstream subsidiary.
Despite its partial divestment from its marketing subsidiary the company continues to increase its market share in the downstream sector through its trading business, Oando Trading which recorded an 11 per cent increase year-on-year, driven by a strong performance in its crude oil trading division and a three per cent increase in turnover to $312 million, from $301 million.
Commenting on the results, the Group Chief Executive of Oando Plc said: “Our results reflect the progress made over the last few quarters and provides an indication of our expectation for the year. Now that our debt profile is down by 78 per cent from $2.5billion as of December 2014 to $ 558 million, and our de – leverage programme is 90 per cent complete with most of our non-core operations divested for good value, we can now focus on steady growth in our upstream entity. ’’
In addition to its positive results Oando has recorded a few milestones in the quarter under review, notably its recent divestment of its 25 per cent residual interest in Axxela Limited to Helios Investment, a leading private equity firm with a focus on investments in Africa, signifying a complete divestment from its midstream business.
According to the company, the move speaks volumes of Oando’s willingness to restructure its business for increased revenue generation by focusing on its dollar earning businesses, Oando Energy Resources (OER), its exploration and production subsidiary, and Oando Trading its trading business.
Tinubu said: “The completion of this divestment signifies another win for the Company. The divestment further reinforces Oando’s ability to create value that can be monetised and the company’s status as the indigenous partner of choice for international companies looking to invest in Nigeria. This transaction favourably positions us to significantly reduce our debt profile and remain focused on growth through our dollar denominated businesses.”