Oando RECORDS 19% PROFIT AFTER TAX IN Q3 2009

Highlights

1. 107% increase in EBITDA
2. Gross profit of N9.23 billion
3. Earnings per share of N7.33
4. 7% increased in Turnover to N343 billion

As projected, non-marketing portfolios have continued to actively contribute to the group’s performance in line with the company’s diversification strategy; besides improved operational efficiency and superior working capital management, this result is attributable to increased contributions from natural gas and monetisation of our upstream businesses.

Oando, which has a primary listing on the Nigerian Stock Exchange (“NSE”) and a secondary listing on the JSE Limited in Johannesburg, also reported a 7% increase in turnover of N343 billion for the same period, compared with N320 billion in the corresponding quarter in 2008.

In addition, the period witnessed an impressive 107% in the Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) to N20 billion compared with N9.5b recorded within the same period in 2008.

The difficult times notwithstanding, Oando sustained its diversification programme as the period witnessed further investments and in the natural gas and upstream businesses. During this quarter, the group entered into agreement with Gazprom, Europe’s largest gas operator, to jointly develop projects in multiple sectors of Nigeria’s oil and gas industry. It also made inroad into Ghana’s gas market with its selection as Strategic Partner to the Ghana National Petroleum Corporation (GNPC) to develop assets and infrastructure to harness natural gas resources from the country’s offshore Jubilee oilfield.

Meanwhile, the upstream division further strengthened its presence in the sector as it secured approval from Nigeria’s Ministry of Petroleum Resources to acquire 75% working interest in Exile’s 40% interest in the Akepo field.

Commenting on the result, Mr. Wale Tinubu, Group Chief Executive said: “We are pleased to announce our results for third quarter 2009 that once again underscores the robustness of our business model. Through prudent resource management and consistent value creation, we have maintained market leadership in spite of the harsh operating environment created by the global economic crisis, the effects of banking sector reforms and the persistent uncertainties over deregulation of the petroleum industry.”

Commenting further, Mr. Tinubu said, “The Group’s outlook remains positive with strong revenue prospects. Additional capacity will be created by the gas division, and the captive power plant, expected on-stream before year end, promises to be a strong revenue source. With the planned reinforcement of our financial structure and a commitment management team, we will accelerate our activity rate to ensure our objective of a robust year end for shareholders is achieved.”

While the Group continues to show resilience across its different businesses, the rest of the year present a more promising outlook. The Group remains focused on fast tracking monetising its upstream portfolio and assets that commenced revenue generation last year and which continues to positively impact the Group’s bottom-line. OML 125 & 134 are already in production and Akepo and OML 56 are expected to start production in the near future.

The Gas and Power division is positioned for superior performance this quarter as its power generation arm, Akute Power Limited will commission its captive power solutions to Lagos Water Corporation with immediate revenue contribution to the Group’s bottom-line.

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