Oando Plc reports 18.1% decline in revenue, posts N13bn net profit in Q3

Oando Plc has reported a net profit of N13.064 billion in its unaudited results for the nine months period ended September 30, 2019, even as revenue declined by 18.1 percent  during the period.

The oil company’s results, released on both the Nigerian and Johannesburg Stock Exchanges, revealed that profit after tax rose by 25.7 percent to N13.064 billion as against N10.396 billion in the corresponding period of 2018.

Revenue depreciated by 18.1 percent to N413.760 billion from N505.085 billion in 2018 and the cost of sales went down by 17.8 percent to N351.461 billion from N427.540 billion, while gross profit stood at N62.299 billion, compared to N77.546 billion in 2018.

Total Group borrowings for the period stood at N193.1 billion, a eight per cent decrease from N210.9 billion as at full year, whilst in its upstream borrowings reduced by 13 per cent to $222 million compared to $255.6 million in 2018.

The Company’s total assets grew to N1.08 trillion under the period review.

Speaking on the results, Group chief executive, Oando Plc, Wale Tinubu, said, “In the period under review, we made substantial progress on our top priority of operational growth and recorded an eight percent increase in hydrocarbon production.

“In conjunction with our partners, we successfully completed an ambitious six-well drilling program, the results of which have been positive, and are particularly excited about the discovery of a significant gas and condensate find at a field in OML 61 of our Joint Venture.”

He stated that this has had a major impact on the Company’s reserves and consequently future cash flows.

According to Tinubu, production has since commenced in October on the completed wells, and the gas will largely be channelled to feed the nation’s power sector through our Joint Venture’s Okpai Power plant, Nigeria’s first independent power plant.

“In addition, we achieved an eight per cent reduction in our debt levels, whilst growing free cash flows. Over the last quarter of the year, our focus will be on the completion of our drilling program as well as “tie-in” of the new discoveries.”

He explained that during the nine months, production increased by eight per cent at 43,045boe per day, compared with 40,039boe per day in the same period of 2018, saying that this was driven by an 11 per cent increase in natural gas production from 120,047mcf per day, year-to-date (YTD), September 2018 to 133,415mcf per day, YTD September 2019 and an eight per cent increase in crude oil production from 16,850bbls per day, YTD September 2018 to 18,147bbls per day YTD, September 2019.

He added that over the course of the year, Oando, in conjunction with JV partners, have aggressively ramped up its drilling program towards increasing oil revenue and meeting its gas obligations.

Looking ahead, the CEO of Oando said “Over the last quarter of the year, working with our JV partners, our focus will be on aggressively pursuing the completion of our drilling program at OMLs 60-63 whilst achieving cost optimization on our operations.”