Lagos, Nigeria – Oando PLC (referred to as “Oando” or the “Group”), Nigeria’s leading indigenous energy group listed on both the Nigerian and Johannesburg Stock Exchange, today announced unaudited results for the three months period ended 31March, 2014, with the following highlights:
Financial Highlights:
• Turnover decreased by 30%, N85.3 billion compared to N121.1 billion (Q1 2013)
• Gross Profit increased by 11%, N14.5 billion compared to N13.0billion (Q1 2013)
• Profit-Before-Tax decreased by 101%, (N59.0 million) compared to N4.3 billion (Q1 2013)
• Profit-After-Tax decreased by 211%, (N2.7billion) compared to N2.4 billion (Q1 2013)
Operational Highlights:
• Successfully secured all debt and equity financing towards the closure of landmark upstream acquisition
• Growth in organic oil production from 334,612bbls to 407,802bbls
• Four years of continuous operations without a Lost Time Incident (LTI) on “OES Teamwork” swamp drilling rig
• Commencement of construction of 8km extension of Lagos natural gas pipeline network
• Expansion of downstream operations in Western and Southern Africa
Commenting, Mr. Wale Tinubu, Group Chief Executive, Oando PLC said: “The first quarter of 2014 proved to be an eventful but difficult one for our Company, having paid a substantial $500mm deposit for the acquisition and continuously incurring the significant cost of interest bearing liabilities without the benefits of the cash flows of the target company, whilst awaiting regulatory approval. The acquisition was subsequently completed post this reporting period,the first stage in our upstream growth strategy is finally complete.We can now look forward toreaping the rewards of this landmark acquisition, which is already being witnessed through a significant growth in both our asset base and income streams”.
Operational Update
Higher oil production and reduced crude losses in our upstream business had an overall positive impacton the performance of the Group. OER grew its oil production by 22% as a result of a reduced shut in period and lower crude oil losses on OML 56. In addition, OML 125 experienced improved production efficiency as its producing wells achieved 98% optimization.
In January 2014, Oando Energy Services achieved four years of continuous operations with a Zero Lost Time Incident (LTI) on one of its four rigs, “OES Teamwork”. It further signifies our commitment to world class operating standards, with the proactive use of our EHSSQ and operational processes.
In the midstream, our Gas & Power business entered into a construction contract to extend the company’s natural gas distribution network by 8km from Ijora to the Marina business district in Lagos state. The project is expected to have a positive environmental impact as natural gas displaces diesel and low pour fuel oil (LPFO) as the primary fuel source in industries and power generation plants in areas the pipeline covers. The pipelinewhen completed will increase our capacity in Lagos from 85mmscf/day to 115mmscf/day, positively growing revenue and profitability.
In the downstream, we continue to expand our footprint across the African continent, with retail outlet upgrades within West Africa as well as the expansion of our trading arm into Southern Africa.We also commenced groundwork for the upgrade of our Apapa Terminal Facility, increasing white product capacity from 29 million liters to 84 million liters.Upon completion, the project is expected to increase optimization of the ApapaSingle Point MooringJetty, eliminate 3rd party throughput spends, and generate income for the company via throughput storage fees.
Ends.
