(Pre-Tax Profit doubles as Upstream and Midstream expansion strategy drive stronger earnings)
Oando Plc (Oando, the Group), Nigeria’s largest integrated energy solutions company, which has its primary listing on the Nigeria Stock Exchange and a secondary listing on the Johannesburg Stock Exchange today announced its unaudited results for the first quarter ended 31 March 2010.
Highlights (in comparison to the results of Q1 2009)
- Pre-tax profit up 109% to N5.1 billion
- Turnover up 18% to N91.3 billion
- Net profit up 73% to N3.1 billion
- Earnings per share up 73% to N3.46K
Oando posted a N3.1 billion Profit After Tax during the quarter, representing a 73% increase relative to the same period of 2009, Pre-tax profit grew 109% to N5.1 billion for the same period in 2009 and turnover increased by 18% to N91.3 billion.
The strength of the First Quarter’s performance reflects the Energy Group’s increasing contributions from the diversified platform coupled with the satisfactory financial performance of the base downstream business. The midstream businesses generated new revenues from its first IPP, the recently commissioned 12.15MW independent power plant for the Lagos State Water Corporation. The upstream businesses deployed a 2nd swamp drilling rig to commence a contract with an International Oil Company; and increased crude oil production from producing assets. The downstream division received delayed Petroleum Subsidy Fund (PSF) payments from the Petroleum Products Pricing Regulatory Authority which significantly contributed to its liquidity and resulted in more manageable interest cost.
Commenting on today’s announcement, Mr. Wale Tinubu, Chief Executive Officer of Oando said, “I am happy to announce a positive start to the year. The first quarter’s success is attributable to the increase in earnings from the midstream and upstream businesses as new project initiatives continue to come on stream. Furthermore our downstream business has performed creditably in line with our financial expectations.
The quarter was heralded by our launching a major capital market transaction – a Rights Issue exercise which received overwhelming support from our shareholders and achieved a 28% oversubscription, the most successful in recent times. Our Gas and Power business commissioned its first captive power plant for Lagos State Water Corporation, and in so doing substantially reduced their operational costs. Furthermore, the project has major social consequences as clean potable water throughput has increased by 300%. Our Energy Services business deployed an additional swamp rig to commence operations with a major International Oil Company and our Exploration and Production business also increased production from our producing Oil and Gas assets.
2010 promises to be a year of tremendous growth for our company. In the downstream, our ability to substantially increase revenue has been assured by the introduction of the Sovereign Debt Note Program which guarantees all Petroleum Subsidy Fund (PSF) payables. In the Upstream, the Local content Policy initiative which promotes indigenous companies has been elevated into Law thus guaranteeing preferential terms, both fiscal and operational for Nigerian Corporates.
As we consolidate our leadership position in Nigeria’s indigenous energy landscape, we look forward to consistently delivering superior results to our shareholders whilst championing these progressive initiatives of our enabling environment in their totality “.
