Indigenous energy firm, Oando Plc grew its top-line by about 18 per cent to N212 billion in the first half of 2016 according to financial reports filed at the Nigerian Bourse.
An interim report and accounts of Oando for the six-month period ended June 30, 2016 released on Monday, August 1, at the Nigerian Stock Exchange, NSE, showed that group turnover rose by 17.8 per cent to N212 billion in first half 2016 as against N180 billion recorded in the comparable period of 2015.
Gross profit however slid by 49 per cent to N19 billion compared with N37.1 billion recorded in the corresponding period of 2015. Loss after tax however decreased by 23 per cent to N27 billion in first half 2016 as against N35.0 billion in comparable period of 2015.
The bottom-line performance came against the background of the effects of the global slump in oil prices which has seen Nigeria’s oil export receipts decline dramatically, indigenous firms face a scale back in proposed Joint Ventures with IOCs, deeper cuts to capital spending, finding new markets and investor wariness.
Oando’s bottom-line was impacted by a 25 per cent reduction in daily production volumes from 56 kboepd in first half 2015 to 45 kboepd in first half 2016, as a result of production disruption from militants’ activities in the Niger Delta. Also, the devaluation of the Naira by the Central Bank of Nigeria in second quarter 2016, from an average exchange rate of N199 per dollar to N280 per dollar, resulting in unrealized foreign exchange losses due to the company’s dollar denominated liabilities.
Group chief executive, Oando Plc, Mr. Wale Tinubu, noted that the first half of the year has revealed how challenging the oil and gas environment was in Nigeria with disruptions from militancy.
He said the group however benefitted from the implementation of the oil price hedge, which has helped it to calm the effects of the disruption of production activities, adding that now that the dollar liquidity position in the country has improved, the group has converted 60 per cent of its dollar denominated obligations to Naira, while restructuring its debt through the N108 Billion medium term note, thus managing any future currency volatility.
Tinubu said as part of plans to return the company to profitability by year-end 2016, Oando is in the concluding phase of its five-pronged strategic group initiatives, 67 per cent of its non-producing asset disposals and 50 per cent of refinancing target have been concluded.
