Lagos, Nigeria – Oando PLC (referred to as “Oando” or the “Group”), Nigeria’s leading indigenous energy group listed on both the Nigerian and Johannesburg Stock Exchange, today announced unaudited results for the nine months period ended September 30, 2018.
Commenting on the results Wale Tinubu, Group Chief Executive, Oando PLC said:
“Today’s positive result is further evidence of the progress made by Oando in 2018 driven by our continued focus on execution and operational efficiency, supported by buoyant commodity prices. The outlook for the remainder of the year is positive and we remain committed to delivering on our value-based strategy towards improving our liquidity by reducing our gearing, improving our profitability by increasing production, and achieving growth via strategic alliances”
RESULTS HIGHLIGHTS
Strong top and bottom line performance
- Turnover increased by 32%, N505.1 billion compared to N383.5 billion (YTD September 2017), driven by higher commodity prices
- Profit-After-Tax increased by 46%, N10.4 billion compared to N7.1 billion (YTD September 2017)
Optimized balance sheet
- Total Group Borrowings decreased by 4%, N227.2 billion compared to N237.4 billion (FYE 2017)
Operational efficiency combined with favourable environment
- Brent prices averaged $72.25 per barrel, resulting in a 45% increase in realized crude selling price compared to the same period in 2017. Performance was further buoyed by sale price increases of 6% for NGL and 31% for our natural gas deliveries.
- Overall working interest production in the period increased to 40,039 boe/day, compared with 39,844 boe/day in the same period in 2017.
- Over 10 million barrels of Crude Oil traded and 445,483 MT of refined petroleum products delivered, compared to over 11 million barrels of crude oil traded and 795,381 MT of refined products delivered in the same period of 2017.
Financial Overview
| N Million (unless otherwise stated) | YTD Sept 2018 | YTD Sept 2017 | % Change |
| Revenue | 505,085 | 383,491 | 32% |
| Gross Profit | 77,546 | 71,206 | 9% |
| Profit-After-Tax | 10,396 | 7,125 | 46% |
| Total Borrowings | 227,192 | 237,442* | -4% |
| Average Realized Oil Price (US$/bbl) | 71.42 | 49.42 | 45% |
| Average Realized Gas Price (US$/mcf) | 1.76 | 1.34 | 31% |
| Average Realized NGL Price (US$/boe) | 10.09 | 9.51 | 6% |
*FYE 2017
OPERATIONS REVIEW
Upstream:
Production for the first nine months ended 30 September 2018
| YTD September 2018 | YTD September 2017 | % Change | |
| Crude Oil (bbls/day) | 16,850 | 15,334 | 10% |
| NGLs (boe/day | 3,181 | 3,259 | -2% |
| Natural Gas (mcf/day) | 120,047 | 127,508 | -6% |
| Total (boe/day) | 40,039 | 39,844 | 1% |
During the nine months ended September 30, 2018, production was slightly above prior year at 40,039 boe/day, compared with 39,844 boe/day in the same period of 2017.
Capital expenditure of $59.3 million (N21.6 billion) were expended in the first nine months of 2018 compared to $22.6 million (N6.9 billion) in same period in 2017. The capital expenditure incurred consists of $51.1 million (N18.6 billion) at OMLs 60 to 63, $3.6 million (N1.3 billion) at Qua Ibo and $4.7 million (N1.7 billion) on other exploration assets.
Downstream:
Traded volumes for the first nine months ended 30 September 2018
| Product | Traded Volumes |
| Crude Oil (bbls) | 10,391,806 |
| Refined Products (MT) | 445,483 |
In the past nine months, Oando Trading has traded over 10 million barrels of crude oil under various contracts with the Nigerian National Petroleum Corporation (NNPC) as well as delivering 445,483 MT of refined products, acting as a key source of liquidity to the Oando Group. Oando Trading continues to solidify its relationships with leading international and local banks, maintaining over $700 million of immediately available structured trade finance facilities.
FINANCE REVIEW
Revenue
Revenue for the period was N505.1 billion, an increase of 32% compared to the same period in 2017 (N383.5 billion). This was primarily driven by an increase in commodity prices.
In the nine months to September 30, 2018, gross sales price for oil increased by 45% to $71.42/ bbl from $49.42/ bbl in the same period in 2017. Sale price for natural gas and NGL also increased by 31% and 6% respectively.
Gross Profit
Gross Profit for the first nine months was N77.6 billion, an increase of 9% compared to the same period in 2017 (N71.2 billion). The increase is primarily driven by higher revenue as a result of higher commodity prices.
Profit-After-Tax
Profit-After-Tax for the period was N10.4 billion, an increase of 46% compared to the same period in 2017 (N7.1 billion).
Borrowings
Total Group Borrowings for the period stands at N227.2 billion, a 4% decrease from FYE 2017 (N237.4 billion) whilst specifically in our upstream subsidiary, borrowings reduced by 16% to $271.7 million compared to $324.6 million in FYE 2017. Since FYE 2014, our total Group borrowing have reduced by 52% from N473.3 billion while borrowing for or our upstream subsidiary has reduced by 66% from $801.6 million.
LOOK AHEAD
Brent continues to trade at over $75 per barrel at the start of the fourth quarter, supported by inventory reductions and geopolitical tensions. Our upstream business is well positioned to take advantage through production growth via investment in targeted profitable projects, whilst maintaining fiscal prudence.
Our Trading business will continue to focus on developing key supply mechanisms in order to facilitate its expansion of trading structures across the face of Africa as well as solidifying our position in Nigeria
The Group as a whole continues to implement programs to improve operational efficiency and maintain capital discipline to assure profitability regardless of the market context.
Ends.
For further information, please contact:
Ayotola Jagun
Company Secretary
The Wings Office Complex
17a Ozumba Mbadiwe Avenue
Victoria Island,
Lagos, Nigeria.
Tel: +234 (1) 270400, Ext 6159
Segun Awodele
Head, Investor Relations
The Wings Office Complex
17a Ozumba Mbadiwe Avenue
Victoria Island,
Lagos, Nigeria.
Tel: +234 (1) 270400, Ext 6204