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Oando Grows 2009 Profit After Tax by 21%

Source: 4/12/2010, Location: Africa

Oando PLC, one of Nigeria’s largest indigenous energy groups, announced a N13.5 billion gross profit for the year ending 31 December 2009, representing a 26% increase from N10.7 billion over the same period in 2008. Profit After Tax also grew by 21% to N10.1billion from N8.3 billion in 2008.

The Group’s consistent growth was recorded amidst persistent challenges in the operating environment which validates the company’s diversified business model. In spite of the enormous difficulties faced by businesses during the year under review, the Group was more profitable over the company’s performance for the year ended 2008. This is a testimony to Oando’s drive towards excellence and leadership in providing diverse energy solutions across the entire spectrum of the energy value chain.

During the year under review, Oando significantly broadened its portfolio of assets and revenue potential with further investments in Independent Power Production (IPP), the 128 km natural gas pipeline expansion in the South-East as well as the acquisition of two rigs to grow its fleet to five swamp drilling platforms.

The year’s turnover dipped by 1% from N339.4 billion in 2008 compared with N336.9 billion achieved in 2009. The decline is attributable to the decision of the Supply and Trading division to suspend further importation of petroleum products as a result of Government’s delay in paying the Petroleum Subsidy Fund receivables (PSF). As a result, the Marketing division was also unable to meet demand due to the resultant product shortages. The effects were however cushioned by the increased revenue from the Gas division and the commencement of rigs drilling operations by the Energy Services division.

Commenting, Mr. Wale Tinubu, Group Chief Executive said: “We are pleased to announce another set of positive results that were achieved in spite of a challenging operating environment for Nigerian corporates and an industry beleaguered by uncertainty in government policies.”

Commenting further, Mr. Tinubu said: “We had notable achievements in the upstream business; successful production tests on Akepo 1 oil well, commencement of production from Obodeti/Obodugwa oilfields and the commencement of deployment of our rigs fleet with International Oil Companies contracts in the Niger Delta.” Oando’s Gas and Power division continues to increase customer connects on its Greater Lagos 3 pipeline grid thereby boosting the Group's performance. While with prudent cash and account receivable management, its Marketing company sustained market leadership and still recorded significant contributions to the bottom line.

During 2010, Oando expects to explore further opportunities for the acquisition of producing assets. In addition, the Group has since commissioned its first independent power plant constructed to produce and sell power to the Lagos State Water Corporation. This is already boosting revenue for the Gas and Power division.

The downstream businesses are anticipating a definite position from the Nigerian government on deregulation of the sector. Meanwhile, the Group aims to consolidate the dominant position of its Supply and Trading division in the West African market.

Energy Services aims to continue its rigs deployment as two of its fleet of five rigs are currently in operation, and two are in an advanced stage of a competitive tender.

“As we commence a new operating year, we are confident in our ability to creatively maximise industry opportunities, and leverage synergies in a bid to consistently deliver, year-on-year, value creation for shareholders”, concluded Tinubu.

The company’s Board recommended the payment of a final dividend of N3.00 per each ordinary share of 50 kobo as well as an issuance of bonus shares of 1 ordinary share of 50 kobo each for every 2 shares of 50 kobo each to its shareholders.

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