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 31 March, 2016, with the following highlights:
Financial Highlights:
- Turnover decreased by 34%, N64.0 billion compared to N97.1 billion (Q1 2015)
- Gross Profit decreased by 57%, N8.8 billion compared to N20.5 billion (Q1 2015)
- Profit-Before-Tax increased by 98%, (N461 million) compared to (N19.4 billion) (Q1 2015)
- Profit-After-Tax increased by 120%, N4.1 billion compared to (N20.9 billion) (Q1 2015)
Operational Highlights:
PLC:
- Restructures debt with the execution of its N94.6Billlion Medium Term Note facility with 10 leading financial institutions.
Upstream:
- Oando Energy Resources (OER) increased 2P net reserves by 6% from 420.3 MMboe to 445.3 MMboe.
Midstream:
- Oando Gas & Power commences development of a 20 mmscf/day Mini-LNG facility in Ajaokuta, Kogi State.
- Oando Gas & Power completes profitable sale of the 12.15MW Akute Independent Power Plant (IPP)
- Signs term sheet for the divestment of the 10.4MW Alausa Independent Power Plant (IPP)
Downstream:
- Oando PLC amends and restates terms of recapitalization via the injection of USD210million from Helios/Vitol JV.
We commenced 2016 on a restoration path by examining our business model and introducing a 6-step corporate initiative strategy to restore our business to profitability by deleveraging the business and optimising our balance sheet through the restructuring our net debt, asset disposal and/or injection of USD 350m of capital. In June, we successfully restructured our debt through a N94.6 billion Medium Term and are well on the way towards achieving our re-capitalization target.
Commenting, Mr. Wale Tinubu, Group Chief Executive, Oando PLC said: “This first quarter of 2016 demonstrates our dedication to return our business to profitability by the end of the 2016. We are succeeding in our corporate initiatives which are today’s driving forces for our business in this new global reality of economic restraint and lower oil prices in our industry. As a group we have placed our focus on growing our dollar earning upstream higher margin and export trading businesses. We continue to count on the consistency of our retail and midstream interest and look forward to a rewarding year, where we solidify our aspirations and return to profitability”.
Operational Update
Oando PLC successfully restructured its debt through a N94.6 billion Medium Term Note with lower capital costs circa 15% and a renewed 5 year tenor.
Oando Energy Resources (OER) completed its 2015 year-end summary of reserves recording a 6% growth in 2P net reserves from 420.3 mmboe to 445.3 mmboe, this increase was largely due to the recognition of reserves related with producible oil and gas volumes from the operator provided work program up to the economic limit of the producing fields. 2C Resources likewise increased by 70% from 122mmboe to 208mmboe.
In response to the current challenging environment we have taken steps to ensure we are financially efficient and as such we announced our plans to delist OER from the Toronto Stock Exchange (TSX), we have not realized any aggregate returns or fresh capital from the cost of listing the business and running our operations in Canada. This along with other financially prudent steps has helped us improve our general and administrative costs from $3.70/boe in Q1 2015 to $3.19/boe in Q1 2016.
Oando Gas & Power (OGP) successfully closes the divestment of the Akute IPP, a 12.15MW power station servicing the Lagos State Water Corporation, this is a testament of our legacy of building successful pipeline businesses, generating returns and transferring on operatorship, likewise we have also signed a term sheet with a reputable player for the divestment of the Alausa IPP which services the Lagos State Secretariat. Both transactions attest to and is an apparent success of our gas development capacity in Lagos State. In the first quarter, OGP signed a development agreement with TVER/ Micro LNG to develop a 20 mmscf/d Mini LNG plant in Ajaokuta, Kogi State, which will service a 1,000km radius in the Northern region of Nigeria. We continue to pursue our goal of revolutionizing gas supply in the country and remain committed to powering up Nigeria, the facility is expected to commence operations in Q2 2017.
Oando Downstream agreed on the terms for the sale of a 60% share of the Oando downstream business to Vitol, the world’s largest commodities trader and Helios Investments Partners, a premier West African focused private equity firm. This alliance serves as a testament of Oando’s legacy of building a successful downstream giant and the partnership will rejuvenate the Nigerian downstream sector through operational efficiencies and economies of scale, thereby serving the Nigerian market even better.
Ends.
