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Oao - Oando Plc - Unaudited Interim Results For 6 Months Ending 30 June

Release Date: 10/08/2007 13:25:15      Code(s): OAO
    OAO - Oando Plc - Unaudited interim results for 6 months ending 30 June     
                      2007                                                      
                                                                                
Oando Plc                                                                   
    (Incorporated in Nigeria and registered as an external company in South     
    Africa)                                                                     
    Registration number: RC 6474                                                
(External company registration number: 2005/038824/10)                      
    Share Code on the JSE Limited:  OAO                                         
    Share Code on the Nigerian Stock Exchange:  UNTP                            
    ISIN: NG00000UNTP0                                                          
("Oando" or "the Company")                                                  
                                                                                
    Unaudited interim results for 6 months ending 30 June 2007                  
                                                                                
Highlights                                                                  
    -    Turnover of $844.09m                                                   
    -    Gross profit of $52.72m                                                
    -    Gross profit margin of 6.25%                                           
-    Operating profit of $27.70m                                            
    -    Profit After Tax of $18.38m                                            
    -    Attributable Profit After Tax of $14.81m                               
    -    Earnings Per Share: 2.59c                                              
-    Gaslink business expansion plan almost near completion                 
    -    Upstream activities gaining momentum pre-production activities at near 
         completion level                                                       
    -    Continuous operating and administrative expenses curtailment           
Review of Results                                                           
                                                                                
    Oando which has a primary listing on the Nigerian Stock Exchange and a      
    secondary listing on the JSE Limited ("JSE") reports attributable Profit    
After Tax ("PAT") for the half year ended 30 June 2007 of $14.81m, an       
    increase of 45% on the comparable period for 2006 when $10.23m was          
    reported.                                                                   
                                                                                
Income Statement Analysis                                                   
                                                                                
    The marginal decrease in consolidated turnover of 7% to $844.09m for the    
    half year 2007 from $912.08m in 2006 reflects mixed macro economic factors  
that prevailed during the months under review, which include:               
    *    Fluctuating Price of crude oil, our base product, which was above $74  
         at some points during the period under review and currently still      
         hovers above $68;                                                      
*    Industrial and general strike to protest the increase in the price of  
         pump price of petroleum and other ancillary product which for a number 
         of days disrupted businesses activities;                               
    *    Scarcity of petroleum products in the early part of the second quarter 
impacted negatively on turnover and margin respectively; and           
    *    Several man-hours lost due to several election holidays.               
                                                                                
         Towards the end of the second quarter, the Federal Government          
increased the price of petroleum products by almost 15%. This action   
         brought about industrial and labour dispute with attendant adverse     
         effect on Oando operations. Total turnover was negatively impacted as  
         a result of this action coupled with several election holidays that    
were declared by the Federal Government, although the effect was       
         cushioned by the price increase. Furthermore, there was an increase in 
         pump head margins at about the same time which resulted in increased   
         gross margins despite the lower turnover.                              
The overall Company gross profit  increased by 14% to $52.72m mainly   
         due to the net effect of the issues laid out above, Oando`s ongoing    
         strategic drive to increase volumes of higher margin products such as  
         lubricants, and contributions made by new businesses. At the operating 
level, Oando`s profit increased to $27.70m. Operating expense costs    
         increased marginally by 2%, which is lower than inflation due to the   
         aggressive expense curtailment strategy put in place by management.    
                                                                                
Especially in the downstream marketing, non fuel revenue making        
         initiatives are becoming increasingly important. This is reflected in  
         the 135% increase in other operating income which contributed to the   
         61% increase in PAT increase to $18.38m.                               

         Attributable PAT to ordinary shareholders rose by 45% to $14.81m from  
         $10.23m in the first half of the year 2007. More importantly the PAT   
         attributable to minority Interest increased substantially by 98% to    
$3.57m underscoring the positive contribution from the subsidiaries    
         and the benefit that will accrue to the shareholders of Oando upon the 
         full completion of the share swap exercise.                            
         Earnings per share increased by 45% to 2.59c from 1.79c in prior year. 

         Balance Sheet Analysis                                                 
                                                                                
         Oando`s total assets rose by 4% to $679.95m compared to $655.19m in    
2006 and total liabilities grew by 2% to $488.92m from $479.66m driven 
         mainly by the increased level of activities. The Group continues its   
         expansion drive, which involves moving away from the lower margin      
         segments and into higher value areas of the energy value chain like    
Upstream Exploration & Production, a strategy which Oando believes     
         will yield significant returns in future.                              
                                                                                
    Prospects                                                                   

    Our sole aspiration continues to be the transformation our current platform 
    into becoming one of the foremost integrated energy players in Africa       
    through aggressive organic growth and sound diversification and             
acquisition. This forms the basis of our continuous investment in the       
    upstream sector of the energy industry, a move, which will yield            
    significant dividend to all our stakeholders in the coming years.           
                                                                                
Our future aspiration however does not reduce our strong support and        
    passion for our existing businesses. We anticipate continuous strong        
    performance of the existing businesses - Marketing, Supply & Trading,       
    Energy Services and Gaslink..                                               

    Our downstream marketing business is being carved out of the group company  
    to give room for fair peer group comparison and sharp focus on its primary  
    activities. The company continues to play a leading role in the sales of    
petroleum products through its existing retail outlets. The company has the 
    largest retail outlets in the country.                                      
    Our Supply & Trading business continues to benefit from the impact of the   
    Petroleum subsidy Fund introduced by the government thus contributing       
significantly to the bottom line of the group. The historically thin        
    margins in this business are compensated for by the high volume of business 
    transaction it undertook in the last quarter. The Company has established   
    itself as a premier company in the supply and distribution of petroleum     
products in the country and West Africa region. The Company continues to    
    position itself as a strategic supplier to many countries in the sub        
    region.                                                                     
                                                                                
Our Gaslink Company, the pioneering gas distribution company of its kind in 
    Nigeria is about to complete its Great Lagos expansion project. The project 
    once completed will see a strong increase in the number of its customers    
    and improved profitability and cashflow. We should start seeing the impact  
of this on the bottom line by the last quarter of the year.                 
                                                                                
    The strategic initiatives  the Group have pursued in the past years to      
    modernise and improve on our processes and procedures, reduce cost, improve 
quality, enhance service delivery, invest in new and emerging opportunities 
    and expand into new frontiers both locally and along the west coast of      
    Africa have positioned us exceptionally well for the long term.             
                                                                                
For and on behalf of the Board                                              
                                                                                
    Mr J Adewale Tinubu                                                         
    Group Chief Executive Officer                                               
10 August 2006                                                              
    Directorate:                                                                
    General M. Magoro (Rtd.)-     Chairman                                      
    Mr. J. A. Tinubu         -    Group CEO                                     
Mr. O. Boyo              -    Deputy Group CEO                              
    Prince F. N. Atako JP.   -    Director                                      
    Mr. A. Akinrele          -    Director                                      
    HRM Oba A. Gbadebo      -     Director                                      
Mr. O. Ibru              -    Director                                      
    Alhaji H. Mahmud         -    Director                                      
    Mr. O. P. Okoloko        -    Director                                      
    10.Mr. I. Osakwe         -    Director                                      
11.Mr. B. Osunsanya      -    Director                                      
    Company Secretary:            Mrs. Oredeji Delano                           
    Registered office: Stallion House, 2, Ajose Adeogun Street, Victoria        
    Island, Lagos, Nigeria                                                      
(Registered office in South Africa: 1st Floor, 32 Fricker Road, Illovo      
    Boulevard, Sandton, 2196, South Africa)                                     
                                                                                
    Office of the South African registrars: Computershare Investor Services     
2004 (Proprietary) Limited (Registration number: 2004/003647/07)            
    70 Marshall Street, Johannesburg, 2001. PO Box 61051, Marshalltown, 2107    
    Auditors: PriceWaterhouseCoopers, Plot 252E Muri Okunola Street, Victoria   
    Isalnd, Lagos                                                               
E-mail: info@oandoplc.com                                                   
                                                                                
    Consolidated Balance Sheet                                                  
    As at 30 June 2007                                                          

                                                                                
    ASSETS                                     2007     2006                    
                                               US$m     US$`m                   
Non current Assets                                                          
    Property, Plant and equipment              102.28   100.29                  
    Intangible Assets                          113.37   99.00                   
    Investment                                 0.44                             
Long-term Receivables                      22.36    26.54                   
                                               238.44   225.83                  
    Current assets                                                              
    Inventories                                114.66   92.78                   
Work-in-progress                                                            
    Trade and other receivables                233.88   313.83                  
    Held for sale investment                                                    
    Cash and cash equivalents                  92.98    22.75                   
441.52   429.36                  
    Total Assets                               679.95   655.19                  
                                                                                
    EQUITY                                                                      
Capital and reserves attributable to                                        
    equity holders                                                              
    Share capital                              2.16     2.16                    
    Share premium                              120.47   120.47                  
Revaluation reserve                        18.48    18.48                   
    Exchange difference                        7.75     4.33                    
    Retained earnings                          23.84    19.37                   
                                               172.70   164.81                  
Minority interest                          18.33    10.73                   
    Total equity                               191.03   175.54                  
                                                                                
    LIABILITIES                                                                 
Non current liabilities                                                     
    Borrowings                                 15.93    24.33                   
    Deferred income tax liabilities            5.32     4.85                    
    Retired benefit obligation                 1.15     2.17                    
Provisions                                          0.16                    
    Other non-current liabilities                                               
                                               22.40    31.51                   
    Current liabilities                                                         
Trade and other payables                   217.37   157.02                  
    Dividend payable                           1.50     0.02                    
    Current income tax liabilities             9.82     8.96                    
    Borrowings                                 237.83   282.15                  
466.53   448.15                  
    Total liabilities                          488.92   479.66                  
    Total equity and liabilities               679.95   655.19                  
                                                                                
Consolidated Income Statement                                               
    For the first half of the year ended 30 June 2007                           
                                                                                
                                                                                
2007        2006                      
                                          US$m        US$m                      
                                                                                
    Turnover                              844.09      912.08                    
Cost of Sales                         (791.38)    (865.90)                  
    Gross Margin                          52.72       46.18                     
    Other Operating Income/(Charges)      6.40        2.72                      
    Operating Expenses                    (31.41)     (30.65)                   
Operating Profit                      27.70       18.25                     
    Interest Payable & Similar Charges    (4.28)      (3.01)                    
    Profit/(Loss) Before Tax              23.42       15.24                     
    Provision for Taxation                (5.04)      (3.81)                    
Profit After Tax                      18.38       11.43                     
    Attributable to Minority Interest     3.57        1.20                      
    Attributable to the Group             14.81       10.23                     
    Earnings per  share (Cents)           2.59        1.79                      

    Adjusted Earnings per  share (Cents)  2.59        1.79                      
                                                                                
    Summarised Consolidated Cash Flow Statements                                
As at 30 June 2007                                                          
                                                                                
                                                                                
                                               June 2007  June 2006             
US$m       US$m                  
    Cash and cash equivalents at the                                            
    beginning of the period                    (52.440)   (167.753)             
    Net cash inflow (used in)/generated from   53.430     (58.970)              
operating activities                                                        
    Cash (used in)/ generated from investing   6.100      (0.590)               
    activities                                                                  
    Net cash flows used in financing                                            
activities                                 ( 26.670)  ( 16.780)             
    Exchange gains / (losses) in cash and                                       
    cash equivalents                                      1.190                 
    Cash and cash equivalents at end of        (19.580)   (242,903)             
period                                                                      
                                                                                
    Consolidated Statement of changes in Shareholder`s Equity                   
    Attributable to equity holders of the company                               
Share   Share   Revalaution  Cummulative Retained  Minority Total      
         Capit   Premiun reserve      translation earnings  interest equity     
         al      US$m    US$m         adjustment  US$m      US$m     US$m       
         US$m                         US$m                                      
Balance   2.16    120.74  10.65                    20.03     10.79    164.38    
as at                                                                           
1ST Jan.                                                                        
2006                                                                            
Currency                                                                        
translat                                                                        
ion                                                                             
adjustme                                                                        
nts                                                                             
Restatem                                                                        
ent of                                                                          
residual                                                                        
value of                                                                        
Property                                                                        
, plant                                                                         
and                                                                             
equipmen                                                                        
t                                                                               
Deffered                                                                        
tax                                                                             
effect                                                                          
of                                                                              
residual                                                                        
value                                                                           
restatem                                                                        
ent                                                                             
Net                       7.83                     19.27     1.10     8.93      
expense                                                                         
recognis                                                     2.76     22.02     
ed                                                                              
directly                                                                        
into                                                                            
equity                                                                          
Retained                                                                        
profit                                                                          
for the                                                                         
period                                                                          
Total                                                                           
income                                                                          
recogniz                                                                        
ed for                                                                          
half                                                                            
year                                                                            
Dividend                                                                        
relating                                                                        
to 2004                                                                         
Minority                                                                        
interest                                                                        
in                                                                              
subsidia                                                                        
ry                                                                              
Interest                                                                        
in                                                                              
subsidia                                                                        
ry                                                                              
excluded                                                                        
from                                                                            
consolid                                                                        
ation                                                                           
Interest                                                                        
in share                                                                        
capital                                                                         
transfer                                                                        
red                                                                             
Dividend                                           (11.28)            (11.28)   
s: Final                                                                        
for 2005                                                                        
Balance                                                                         
as at     2.16    120.74  18.48                    28.03     14.65    184.05    
31st                                                                            
December                                                                        
2006                                                                            
Balance                                                                         
as at     2.16    120.74  18.48                    28.03     14.65    184.05    
1st                                                                             
January                                                                         
2007                                                                            
Currency                               7.75                  0.11     7.60      
translat                                                                        
ion                                                                             
adjustme                                                                        
nts                                                                             
Net                                                                             
expense                                                                         
recognis                                                                        
ed                                                                              
directly                                                                        
into                                                                            
equity                                                                          
Retained                                                                        
Earrning                                                                        
s  for                                                                          
the                                                                             
period                                                                          
Total                                              14.81     3.57     18.38     
recognis                                                                        
ed                                                                              
income                                                                          
for the                                                                         
half                                                                            
year                                                                            
Dividend                                           (19.00)            (19.00)   
relating                                                                        
to 2006                                                                         
Minority                                                                        
interest                                                                        
dividend                                                                        
in                                                                              
subsidia                                                                        
ry                                                                              
Balance                                                                         
as at     2.16    120.47  18.48        7.75        23.84     18.33    191.03    
30th                                                                            
June                                                                            
2007                                                                            
    Notes to the condensed unaudited financial statements                       
30 June 2007                                                                
                                                                                
    1. General information                                                      
    Oando Plc (formerly Unipetrol Nigeria Plc) was registered by special        
resolution as a result of the acquisition of the shareholding of Esso       
    Africa Incorporated (principal shareholder of Esso Standard Nigeria         
    Limited) by the Federal Government of Nigeria. The Company was partially    
    privatised in 1991. It was however fully privatised in the year 2000        
consequent upon the sale of Federal Government`s 40% shareholding in the    
    Company. 30% was sold to core investors (Ocean and Oil Investments Limited) 
    and the remaining 10% to the Nigerian public. In December 2002, the Company 
    merged with Agip Nigeria Plc following its acquisition of 60% Agip          
Petroli`s stake of Agip Nigeria Plc in August of the same year. The Company 
    formally changed its name from Unipetrol Nigeria Plc to Oando Plc in        
    December 2003.                                                              
                                                                                
Oando and its subsidiaries (together "the Group") have their primary        
    listing on the Nigerian Stock Exchange.                                     
                                                                                
    The Group has marketing and distribution outlets in Nigeria, Ghana and Togo 
and other smaller markets along the West African coast. During the year,    
    the Group`s beneficial ownership in two subsidiaries, Oando Trading         
    (Bermuda) and Oando Supply and Trading, was increased from 49% to 51%.      
                                                                                
Oando Trading and Oando Supply and Trading have been treated as             
    subsidiaries. The other investors currently having 49% respectively of      
    Oando Trading and Oando Supply and Trading are Ocean and Oil Holdings       
    (Nigeria) Limited and Ocean and Oil Holdings (BVI) Limited respectively.    
Furthermore, the Group invested in a new subsidiary, Oando Energy Services, 
    in January 2005 to carry out its energy services business, holding a  51%   
    interest while the remaining 49% is owned by Ocean and Oil Holdings         
    (Nigeria) Limited.                                                          
By the scheme of arrangement concluded on the 30th June 2007, wherein Oando 
    Plc acquired Ocean and Oil Investment`s shares in the following             
    identifiable subsidiaries of Oando:                                         
    Oando Energy Service,                                                       
Oando Supply and Trading,                                                   
    Oando Production and Development Company                                    
    Oando Exploration and Production Limited and;                               
    Oando Trading Limited in return for increase in shares in Oando plc.        

    The Company also acquired the right of 12 identifiable holders of Gaslink   
    shares in exchange for cash and shares in the Oando plc. By this            
    transaction, Oando now owns and can exercise full control over all these    
subsidiaries.                                                               
    2. Summary of significant accounting policies                               
                                                                                
    The principal accounting policies applied in the preparation of these       
consolidated financial statements are set out below. These policies have    
    been consistently applied to all the years presented, unless otherwise      
    stated.                                                                     
                                                                                
2.1 Basis of preparation                                                    
                                                                                
    The consolidated financial statements of Oando have been prepared in        
    accordance with International Financial Reporting Standards (IFRS). The     
consolidated financial statements have been prepared under the historical   
    cost convention, as modified by the revaluation of land and buildings, and  
    financial assets and financial liabilities at fair value through profit or  
    loss.                                                                       
The preparation of financial statements in accordance with IFRS requires    
    the use of certain critical accounting estimates. It also requires          
    management to exercise judgement in the process of applying the Group`s     
    accounting policies.                                                        

    Early adoption of standards                                                 
    In 2004, the Group early adopted the IFRS below, which are relevant to its  
    operations. These have been consistently applied in these financial         
statements.                                                                 
                                                                                
    IAS 2 (revised 2003) Inventories                                            
    IAS 8 (revised 2003) Accounting Policies, Changes in Accounting Estimates   
and Errors                                                                  
    IAS 10 (revised 2003) Events after the Balance Sheet Date                   
    IAS 16 (revised 2003) Property, Plant and Equipment                         
    IAS 17 (revised 2003) Leases                                                
IAS 21 (revised 2003) The Effects of Changes in Foreign Exchange Rates      
    IAS 24 (revised 2003) Related Party Disclosures                             
    IAS 27 (revised 2003) Consolidated and Separate Financial Statements        
    IAS 28 (revised 2003) Investments in Associates                             
IAS 32 (revised 2003) Financial Instruments: Disclosure and Presentation    
    IAS 33 (revised 2003) Earnings per share                                    
    IAS 36 (revised 2004) Impairment of Assets                                  
    IAS 38 (revised 2004) Intangible Assets                                     
IAS 39 (revised 2003) Financial instruments: Recognition and measurement    
    IFRS 2 (issued 2004) Share-based payments                                   
    IFRS 3 (issued 2004) Business Combinations                                  
    IFRS 5 (issued 2004) Non-current Assets Held for Sale and Discontinued      
Operations                                                                  
    The early adoption of IAS 10 has resulted in a change in the accounting     
    policy for dividends. Proposed dividends, which were previously recognised  
    in the year prior to the declaration have been adjusted in accordance with  
IAS 10 and 37 respectively.                                                 
    The application IAS 16 has affected the accounting for fair value reserve   
    relating to revalued land and buildings upon disposal.                      
    Under previous GAAP, the revaluation surplus included in equity in respect  
of an item of property, plant and equipment were transferred to the income, 
    when the asset is disposed of, to determine profit on disposal. Adjustments 
    have been passed to transfer the related amounts directly to retained       
    earnings in accordance with IAS 16. Also, early adoption of IAS 16 (revised 
2004) has necessitated the disclosure of prior year comparatives for all    
    movements in property plant and equipment.                                  
    IAS 21 (revised 2003) has affected the translation of foreign entities`     
    income statements, on which closing rates were previously applied but now   
amended and translated at average rates. The functional currency of each of 
    the consolidated entities has also been re-evaluated based on the guidance  
    to the revised standard. All the Group entities have the same functional    
    currency as their presentation currency. These financial statements have    
been presented in a currency other than the Company`s functional currency,  
    being US Dollars, to meet the filing requirements of the JSE.               
    IAS 24 (revised 2003) has affected the identification of related parties    
    and some other related-party disclosures.                                   
IAS 27 (revised 2004) has affected the consolidation of subsidiaries.       
    Certain subsidiaries, which were not included in the consolidation under    
    previous GAAP, have now been consolidated.                                  
    The early adoption of IAS 33 has resulted in a change in the computation of 
earnings per share. Earnings per share, which were previously computed on   
    the basis of the number of shares in issue at the end of the reporting      
    period, have been adjusted on the basis of the weighted average number of   
    shares in accordance with IAS 33                                            
The early adoption of IAS 39 has resulted in a change in accounting for     
    financial assets and liabilities.                                           
    Although the Group did not have any share-based payments as at the balance  
    sheet date, upon adoption of a scheme, which is                             
currently being considered by the Group, all share based payments will be   
    accounted for under IFRS 2.                                                 
    The early adoption of IFRS 5 has resulted in a change in the accounting for 
    non-current assets held for sale and discontinued operations as qualifying  
assets have been reclassified accordingly.                                  
    The early adoption of IFRS 3, IAS 36 (revised 2004) and IAS 38 (revised     
    2004) resulted in a change in the accounting policy for goodwill. Until 31  
    December 2002, goodwill was:                                                
*    Amortised on a straight line basis over a period ranging from 5 to 20  
         years; and                                                             
    *    Assessed for an indication of impairment at each balance sheet date.   
    In accordance with the provisions of IFRS 3:                                
*    The Group ceased amortisation of goodwill from 1 January 2003;         
    *    Accumulated amortisation as at 31 December 2002 has been eliminated    
         with a corresponding decrease in the cost of goodwill; and             
    *    Goodwill was tested for impairment at 1 January 2003, the transition   
date. Also, from the year ended 31 December 2003 onwards, goodwill is  
         tested annually for impairment,                                        
    as well as when there are indications of impairment. The Group has also     
    reassessed the useful lives of its intangible assets in accordance with the 
provisions of IAS 38. No adjustment                                         
    resulted from this reassessment.                                            
    All changes in the accounting policies have been made in accordance with    
    the transition provisions in the respective standards.                      
The early adoption of IAS 1, 2, 8, 17 28, and 32 (all revised 2003) did not 
    result in substantial changes to the Group`s accounting                     
    policies. In summary:                                                       
    *    IAS 1, 2, 28 and 32 had no material effect on the Group`s policies.    
*    IAS 8 (revised 2004) has resulted in the disclosure of the impact of   
         new standards                                                          
                                                                                
    2.2 Consolidation                                                           
(a) Subsidiaries                                                            
    Subsidiaries include all entities (including special purpose entities) over 
    which the Group has the power to govern the financial and operating         
    policies generally accompanying a shareholding of more than one half of the 
voting rights. The existence and effect of potential voting rights that are 
    currently exercisable or convertible are considered when assessing whether  
    the Group controls another entity. Subsidiaries are fully consolidated from 
    the date on which control is transferred to the Group. They are             
deconsolidated from the date that control ceases.                           
    The purchase method of accounting is used to account for the acquisition of 
    subsidiaries by the Group. The cost of the acquisition is measured as the   
    fair value of the assets given, equity instruments issued and liabilities   
incurred or assumed and the date of plus costs directly attributable to the 
    acquisition. Identifiable assets acquired and liabilities and contingent    
    liabilities assumed in a business combination are measured initially at     
    their fair values at the acquisition date irrespective of the extent of any 
minority interest. The excess of the cost of acquisition over the fair      
    value of the Group`s share of the identifiable net assets acquired is       
    recorded as goodwill. If the cost of acquisition is less than the fair      
    value of the net assets of the subsidiary acquired, the difference is       
recognised directly in the income statement. All balances and unrealised    
    surpluses and deficits on transactions between group companies have been    
    eliminated. Where necessary, accounting policies for subsidiaries have been 
    changed to be consistent with the policies adopted by the Company. Separate 
disclosure (in equity) is made of minority interests.                       
                                                                                
    (b) Associates                                                              
                                                                                
Associates are all entities over which the Group has significant influence  
    but not control, generally accompanying a shareholding of between 20% and   
    50% of the voting rights. Investments in associates are accounted for by    
    the equity method of accounting and are initially recognised at cost. The   
Group`s investment in associates includes goodwill (net of any accumulated  
    impairment loss) identified on acquisition. The Group`s share of its        
    associates` post-acquisition profits or losses is recognised in the income  
    statement, and its share of post acquisition movements in reserves is       
recognised in reserves. The cumulative post-acquisition movements are       
    adjusted against the carrying amount of the investment.                     
    When the Group`s share of losses in an associate equals or exceeds its      
    interest in the associate, including any other unsecured receivables, the   
Group does not recognise further losses, unless it has incurred obligations 
    or made payments on behalf of the associate. Unrealised gains on            
    transactions between the Group and its associates are eliminated to the     
    extent of the Group`s interest in the associates. Unrealised losses are     
also eliminated unless the transaction provides evidence of an impairment   
    of the                                                                      
    asset transferred. The accounting policies of the associates are consistent 
    with the policies adopted by the Group.                                     

    Goodwill included in the carrying amount of an investment is neither        
    amortised nor tested for impairment separately by applying the requirements 
    for impairment testing goodwill in IAS 36, Impairment of Assets. Instead,   
the entire carrying amount of the investment is tested under IAS 36 for     
    impairment.                                                                 
                                                                                
    All subsidiaries and associates have uniform calendar year ends.            

    2.3 Segment reporting                                                       
    A business segment is a group of assets and operations engaged in providing 
    products or services that are subject to risks and returns that are         
different from those of other business segments. A geographical segment is  
    engaged in providing products or services within a particular economic      
    environment that are subject to risks and return that are different from    
    those of segments operating in other economic environments.                 
2.4 Foreign currency translation                                            
    (a) Functional and presentation currency                                    
                                                                                
    Items included in the financial statements of each of the Group`s entities  
are measured using the currency of the primary economic environment in      
    which the entity operates (`the functional currency`). The functional       
    currency of the Group is the Naira. The consolidated financial statements   
    are presented in US dollars, which is the company`s presentation currency   
for the purpose of filing outside Nigeria.                                  
                                                                                
    (b) Transactions and balances                                               
    Foreign currency transactions are translated into the functional currency   
using the exchange rates prevailing at the dates of the transactions.       
    Foreign exchange gains and losses resulting from the settlement of such     
    transactions and from the translation at year-end exchange rates of         
    monetary assets and liabilities denominated in foreign currencies are       
recognised in the income statement, except when deferred in equity as       
    qualifying cash flow hedges and qualifying net investment hedges.           
    c) Group companies                                                          
    The results and financial position of all the group entities (none of which 
has the currency of a hyperinflationary economy) that have a functional     
    currency different from the presentation currency are translated into the   
    presentation currency as follows:                                           
                                                                                
1    assets and liabilities for each balance sheet presented are translated 
         at the closing rate at the date of that balance sheet;                 
    2    Income and expenses for each income statement are translated at        
         average exchange rates; and all resulting exchange differences are     
recognised as a separate component of equity.                          
    3    On consolidation, exchange differences arising from the translation of 
         the net investment in foreign entities are taken to shareholders`      
         equity. Upon disposal of part or all of the investment, such exchange  
differences are recognised in the income statement as part of the gain 
         or loss on sale.                                                       
    3. Earnings per share                                                       
    Basic Earnings per Share (EPS) is calculated by dividing the profit         
attributable to the equity holders of the Company by the weighted average   
    number of shares in issue during the period.                                
                                                                                
                                                                                

                                                     2007     2006              
    Profit attributable to equity holders of the     14.81    10.23             
    Company   ($`m)                                                             
Weighted average number of shares in issue       572,301  572,301           
    (thousands)                                                                 
                                                                                
    Profit attributable to equity holders of the     14.81    10.23             
Company  ($`m)                                                              
                                                                                
    Basic earnings per share (cents)                 2.59     1.79              
    Weighted average number of shares in issue       572,301  572,301           
(thousands)                                                                 
    Adjustment for bonus issues                      -        -                 
    Weighted average number of shares for diluted    572,301  572,301           
    EPS (thousands)                                                             
Diluted earnings per share (cents)               2.59     2.79              
                                                                                
    Headline earnings per share (for JSE listing                                
    purposes)                                                                   
Profit attributable to equity holders of the     14.81    10.23             
    Company                                                                     
                                                                                
    Headline earnings per share to earnings basis    2.59     1.79              
(cents)                                                                     
    Headline earnings per share diluted earnings     2.59     1.79              
    basis (cents)                                                               
    Net assets per share (cents)                     33.34    32                
Tangible assets per share (cents)            118.81   116                    
    4. Adjustments to Prior year results                                        
    We have made adjustments to prior year results to enable like for like      
    comparisons with current year results                                       

    5. Post balance sheet events                                                
    There are no significant post balance sheet events.                         
                                                                                
6. Independent review by the auditors                                       
    These results have not been reviewed by Oando`s auditors                    
Date: 10/08/2007 13:25:13 Supplied by www.sharenet.co.za                     
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