M
mrsam
Guest
The Nigerian oil and gas sector is gradually recovering from the upheaval of low oil prices; this is due in part to the exemption of Nigeria from the global oil production cut by the Organization of the Petroleum Exporting Countries (OPEC) as well as containment of the Niger Delta unrest which has led to a steady rise in oil production. In May 2017, the country’s oil production increased by 273,600 barrels per day (bpd) to 1.484 million barrels per day (bpd), a testament to these changes.
The approval of the Petroleum Industry Governance and Institutional Framework Bill (PIGB) is set to further improve the sector. The anticipated fall out of the PIGB is a more efficiently regulated oil and gas industry and a conducive business environment for sector players. More recently, specifically Thursday, July 27 three petroleum industry bills passed second reading in the Senate; this is expected to further encourage substantial investment in the petroleum industry.
Against this backdrop Oando PLC, Nigeria’s leading oil and gas company further bolstered confidence in the sector by declaring a N4.6 billion Profit-After-Tax in its half year ended 30 June, 2017 results.
An analysis of the half-year (H1) 2017 results of oil and gas companies operating in Nigeria reveals a steady increase in earnings. Royal Dutch Shell’s cash flow rose to the highest since the oil crash began, generating $3.6 billion earnings, Tullow Oil’s revenue increased by 46% to $0.8 billion and Oando proved no different.
A comparative review of Oando’s financials further show positive performance across all financial indices, turnover increased by 26% to N267.1 billion from N212.3 billion, gross profit increased by 76% to N33.4 billion from N19 billion, net finance costs more than halved to N16.4 billion from N35.3 billion while profit-after-tax increased by 117% to N4.6 billion from a loss of N26.9 billion in H1 2016.
For the third time in a row, Oando has posted positive financials defying speculations and bolstering confidence in the Oil and Gas sector. In its final year-end 2016 results the company declared N3.5 billion PAT, in the first quarter of 2017 Oando posted N1.7 billion PAT and more recently, N4.6 billion PAT in its half year ended June 30, 2017 results. Amidst the sectorial challenges the company continues to wax strong.
These numbers are indicative of the company’s ability to manoeuvre the cyclical nature of the sector by adapting quickly to continued low oil prices. Oando has done this through the successful implementation of its corporate strategic initiatives of Growth, Deleverage and Profitability alongside its renewed focus on its dollar earning businesses.
Commenting on the company’s financials, Mr. Wale Tinubu, Group Chief Executive, Oando PLC said: “With security concerns in the Niger Delta receding, Nigeria’s economic recovery has been buoyed by a boost in oil output, while the legislative approval of certain segments of the Petroleum Industry Bill (PIB) provides greater long-term policy certainty for the sector. Our returns underline our continued successful foray into the Upstream.”
Oando scored significant operational highlights in the first half of 2017. The company through its Upstream business, Oando Energy Resources, successfully realized N3.2 billion in net cash from the crystallization of the Corporate Facility hedges (1,590 bbls/day) while in the second quarter of 2017, it successfully completed the sale of its interest in OMLs 125 and 134 to Nigerian Agip Exploration Limited “NAE” for a profit of N4.6 billion.
In its Downstream business, Oando Trading (OTD), the company witnessed a 40% growth in traded volumes and a commendable 147% increase in turnover to N217.5 billion compared to N88.1billion for the comparative period of 2016. The trading business lifted volumes exceeding 7.5mmbbls of crude and imported 610,000MT of refined petroleum products, a 72% and 20% increase respectively.
The Structured Trade Finance lines in its Downstream business increased by N76.5 billion to N214.1 billion in total, from a total of 5 International and African banks, further validation that Oando is still a good business investment. This increase in financing allows the company to achieve greater trading capacity and in turn more volumes.
Speaking on the outlook for the company in the second half of 2017, Wale Tinubu said, We remain committed to optimizing our overall production base, seeking unique profit-driven opportunities to further partner with IOCs, while firming up our balance sheet to provide greater shareholder value.”
The approval of the Petroleum Industry Governance and Institutional Framework Bill (PIGB) is set to further improve the sector. The anticipated fall out of the PIGB is a more efficiently regulated oil and gas industry and a conducive business environment for sector players. More recently, specifically Thursday, July 27 three petroleum industry bills passed second reading in the Senate; this is expected to further encourage substantial investment in the petroleum industry.
Against this backdrop Oando PLC, Nigeria’s leading oil and gas company further bolstered confidence in the sector by declaring a N4.6 billion Profit-After-Tax in its half year ended 30 June, 2017 results.
An analysis of the half-year (H1) 2017 results of oil and gas companies operating in Nigeria reveals a steady increase in earnings. Royal Dutch Shell’s cash flow rose to the highest since the oil crash began, generating $3.6 billion earnings, Tullow Oil’s revenue increased by 46% to $0.8 billion and Oando proved no different.
A comparative review of Oando’s financials further show positive performance across all financial indices, turnover increased by 26% to N267.1 billion from N212.3 billion, gross profit increased by 76% to N33.4 billion from N19 billion, net finance costs more than halved to N16.4 billion from N35.3 billion while profit-after-tax increased by 117% to N4.6 billion from a loss of N26.9 billion in H1 2016.
For the third time in a row, Oando has posted positive financials defying speculations and bolstering confidence in the Oil and Gas sector. In its final year-end 2016 results the company declared N3.5 billion PAT, in the first quarter of 2017 Oando posted N1.7 billion PAT and more recently, N4.6 billion PAT in its half year ended June 30, 2017 results. Amidst the sectorial challenges the company continues to wax strong.
These numbers are indicative of the company’s ability to manoeuvre the cyclical nature of the sector by adapting quickly to continued low oil prices. Oando has done this through the successful implementation of its corporate strategic initiatives of Growth, Deleverage and Profitability alongside its renewed focus on its dollar earning businesses.
Commenting on the company’s financials, Mr. Wale Tinubu, Group Chief Executive, Oando PLC said: “With security concerns in the Niger Delta receding, Nigeria’s economic recovery has been buoyed by a boost in oil output, while the legislative approval of certain segments of the Petroleum Industry Bill (PIB) provides greater long-term policy certainty for the sector. Our returns underline our continued successful foray into the Upstream.”
Oando scored significant operational highlights in the first half of 2017. The company through its Upstream business, Oando Energy Resources, successfully realized N3.2 billion in net cash from the crystallization of the Corporate Facility hedges (1,590 bbls/day) while in the second quarter of 2017, it successfully completed the sale of its interest in OMLs 125 and 134 to Nigerian Agip Exploration Limited “NAE” for a profit of N4.6 billion.
In its Downstream business, Oando Trading (OTD), the company witnessed a 40% growth in traded volumes and a commendable 147% increase in turnover to N217.5 billion compared to N88.1billion for the comparative period of 2016. The trading business lifted volumes exceeding 7.5mmbbls of crude and imported 610,000MT of refined petroleum products, a 72% and 20% increase respectively.
The Structured Trade Finance lines in its Downstream business increased by N76.5 billion to N214.1 billion in total, from a total of 5 International and African banks, further validation that Oando is still a good business investment. This increase in financing allows the company to achieve greater trading capacity and in turn more volumes.
Speaking on the outlook for the company in the second half of 2017, Wale Tinubu said, We remain committed to optimizing our overall production base, seeking unique profit-driven opportunities to further partner with IOCs, while firming up our balance sheet to provide greater shareholder value.”
