Homegrown energy group, Oando Plc, last week released its audited results for the 12 months period ended December 31, 2017.
The results showed gross profit rising by 81 percent, N88.1 billion compared to N48.6 billion in 2016, while the Profit-After-Tax increased by 405 percent, N19.8 billion compared to N3.9 billion two years ago.
However, the firm’s turnover slumped by 13 percent to N497.6 billion from N569.2 billion a year earlier, while the net debt reduced by 6 percent from N1 billion to N230.6 billion in 2016.
Financial statements showed that the group’s upstream arm, Oando Energy Resources (OER), recorded a 8 percent decrease in total production to 14.7MMboe (average 40,188 boe/day) from 15.9MMboe (average 43,503 boe/day) in comparative period of 2016.
OER realised a net profit of N26.7 billion ($86.1 million) compared with N91.83million ($0.33 million) in the comparative period of 2016.
During the period under review, the firm maintained 2P Reserves of 470.7mmboe due to good reservoir management practices and also concluded the sale of interests in OMLs 125 and 134 to the Operators for cash proceeds of N1.7 billion ($5.5m) and the assumption of N26.2 billion ($84.5m) in cash call liabilities due to the joint ventures.
Furthermore, OER recorded an average production of 40,188 boe/day in the 12 months ended December 31, 2017 compared to 43,503 boe/day in the comparative period of 2016. This was primarily due to significant reductions in gas production and delivery caused by including the rupturing of Gas Transmission System (GTS-4) gas line, pipeline and terminal constraints at OML 60 to 63. The Sale of OML 125 & 134 also contributed to reduced total production for FY 2017.
Also, OER recorded a net profit of N26.33 billion ($86.1 million) compared with N91.83million ($0.3 million) in the comparative period of 2016. The increase in profitability was primarily due to improved revenue between the periods, income from the sale of OML 125 & 134, lower production expenses, increase in gains on financial instruments which were offset by lower tax recoveries.
For its midstream:, its affiliate, Axxela, achieved an 11 percent increase in natural gas deliveries and the Greater Lagos IV pipeline network was completed.
An additional six customers were added to the Greater Lagos IV pipeline network bringing the total number of customers to 175.
Also, during the period, the company completed the Central Horizon Expansion Pipeline in Port Harcourt as well as the Tincan HDD project.
Axxela recorded an 11 percent increase in natural gas deliveries in 2017. This achievement was in spite of restricted gas supply in H1 2017 due to the sabotage of upstream gas supply facilities by militants.
Group Chief Executive, Wale Tinubu, who commented on the result, said, “2017 was an important and positive milestone for the company.
“The business recorded a year-end profit of N19.8 billion; a culmination of 4 consecutive quarters of positive results, validating our promise to shareholders of returning to and maintaining profitability.
“We have commenced 2018 buoyed by our unrelenting commitment to our strategy and remain confident in its success,” he added.