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Oao - Oando Plc - Audited Results For The Full Year Ended 31 December 2009

Release Date: 12/04/2010 13:13:04      Code(s): OAO
OAO - Oando Plc - Audited results for the full year ended 31 December 2009      
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: NGOANDO00002                                                              
("Oando" or "the Company" or "the Group")                                       
Audited results for the full year ended 31 December 2009                        
Highlights                                                                      
-   Turnover of $2.3 billion                                                    
-   Gross profit of $242 million                                                
-   Operating profit of $150 million                                            
-   Profit after tax of $75 million                                             
-   Attributable profit after tax of $75.91 million                             
-   Earnings per share of 8.39 cents                                            
-   Results affected by approximately 20% depreciation of local currency        
-   Gross margin adversely impacted by additional finance costs suffered on     
   Petroleum Support Fund (PSF) receivables                                     
-   Increased contribution from upstream and gas distribution operations        
-   One of the rigs was put into operations whilst a second one has secured     
a contract and is at an advanced stage of being mobilized into               
   operations                                                                   
Review of results                                                               
Oando, which has a primary listing on the Nigerian Stock Exchange ("NSE") and   
a secondary listing on the JSE Limited ("JSE"), reports profit after tax        
("PAT") for the full year ended 31 December 2009 of $74.92 m.                   
Income statement analysis                                                       
The Group`s revenue reduced by 15% compared with 2008 while profit after tax    
remained about the same. This can be attributed to the challenging operating    
environment some of which are analysed below:                                   
-   depreciation of the Naira from an average of N117:$1 to N147:$1,            
   representing about 20 depreciation;                                          
-   increase in average borrowing costs from about 16%  per annum to 23%        
   per annum;                                                                   
-   banking sector reforms and resultant difficulties in assessing credits      
   required for operational and project execution; and                          
-   uncertainties surrounding deregulation.                                     
Turnover review                                                                 
Turnover reduced by 15% compared with 2008. This was due mainly to              
uncertainties in the government policies about deregulation of downstream       
sector of petroleum industry and delay in payment of petroleum subsidy by       
Government. The delay in PSF payment caused additional financing costs which    
led to increase in product costs. This forced our Supply and Trading and other  
players to discontinue importation of petroleum motor spirit during the last    
quarter of 2009. This action resulted in product supply shortages to the        
Marketing arm of the business. The revenue reduction situation was further      
compounded by exchange rate depreciation in the Naira to other currencies.      
However, the effect of the above on the Group`s revenue was cushioned by        
increased gas volume arising from additional capacity provided by               
commissioning of the Greater phase three projects and deployment of one the     
Energy Services` rigs into drilling operations.                                 
The Group acquired controlling interests in Equator Exploration Limited (EEL)   
during the year. Other income increased mainly as a result of profit generated  
by negotiated settlement of EEL`s outstanding liabilities to creditors at       
substantial discounts.                                                          
Expenses review                                                                 
Marketing and selling expenses witnessed 17% reduction as a result of reduced   
petroleum products availability and improved efficiency.                        
Administrative expenses reduced by 15% over previous years. This arose mainly   
from devaluation of the Naira and improved efficiency in operating expenses     
management.                                                                     
Finance cost increased during the year by about 18% due to upward review of     
borrowing rates from an average of about 16% to about 23% per annum; and        
interest on operational rig that was hitherto capitalised.                      
Balance sheet analysis                                                          
Non-current assets including property, plant and equipment and pipeline         
assets` costs included in long term receivables, rose by 26% over 2008 as a     
result of additional capital expenditure on ongoing projects like Lagos State   
Water Corporation Independent Power Project (IPP), East Horizon Gas pipeline    
project, upstream assets` development, etc. In addition, the Energy Services    
division acquired two additional swamp rigs bringing the total to five rigs.    
Inventory and trade account receivables reduced by 47% and 9% respectively.     
This was attributable to deliberate efforts at reducing working capital         
requirements as well as reduced importation of products by Supply and Trading   
with attendant reduction in outstanding PSF receivables.                        
During the year, a number of credit facilities matured and were repaid from     
internal resources. This explained the reduction of 56% and 13% recorded in     
non-current borrowings and current borrowings respectively.                     
Prospects for the future                                                        
The drive towards portfolio diversification continued during the year with      
efforts at monetising the strategic investments in upstream, rigs and natural   
gas pipeline assets.                                                            
For the upstream business, revenue generation during the year came only from    
OML 125 & OML 134. However, significant investments have been made in OML 90    
and OML 56 towards completing outstanding issues required for bringing the      
assets into production. We expect that these developments will be completed in  
2010. In order to further enhance our upstream portfolio, the Group acquired    
controlling interest in Equator Exploration Limited (EEL) during the year. EEL  
owns various assets in the Niger Delta region of Nigeria and the Joint          
Development Zone (JDZ) of Sao Tome and Principe. We continue to collaborate     
with relevant partners to quickly bring these assets into income generation     
mode while exploring opportunities for further acquisition of more producing    
assets. We are confident that these efforts will further boost contribution of  
upstream business to the Group`s revenue and profitability in the near term.    
The contribution of the gas and power arm of the business to the Group`s        
revenue increased significantly during the period. This was because of          
additional capacity provided by the recently completed Greater Lagos Phase 3    
pipeline project as more customers were connected to the supply grid in 2009.   
We expect additional customers to be connected in 2010 which will further       
improve gas revenue. In addition, construction work at the Eastern Horizon      
Company`s 128km pipeline project is progressing steadily. The 12.15MW captive   
power plant constructed to generate and sell power to Lagos State Water         
Corporation (LSWC) has been completed and undergoing necessary test runs and    
statutory approvals. We expect the plant to be commissioned during the first    
quarter of 2010.                                                                
We expect the Federal Government of Nigeria to announce a definite position on  
the deregulation of the downstream sector of the petroleum industry soon and    
also promulgate the draft Petroleum Industry Bill (PIB) before the National     
Assembly into law. In spite of this and the attendant uncertainties on our      
downstream marketing business, we shall ensure that our business remains        
competitive, by improving customers` retention and efficiency in working        
capital management. Our Supply & Trading business will also consolidate its     
aim of dominating the West African market. We shall also seek to increase our   
share in the deregulated products` market. Efforts will be made to reduce       
importation under PSF to the barest minimum and improve relationship with       
relevant stakeholders to ensure prompt settlement of PSF claims.                
Our Energy Service business has launched itself into the swamp rig business by  
deploying one of its rigs to operational use in a drilling contract with Agip   
Exploration. The second rig is at advanced stages of being mobilised for        
operational use. We expect to bring two additional rigs into operation in 2010  
while others will be fully ready to be put into use.                            
With all these investments, we are confident of achieving accelerated growth    
in the Group`s revenue and profitability from 2010.                             
Consolidated Balance Sheet                                                      
as at 31 December 2009                                                          
                                             2009          2008                 
ASSETS                                        $`million     $`million           
Non-current assets                                                              
Property Plant & Equipment                    900.13        693.48              
Intangible Assets                             166.49        175.04              
Deferred income tax assets                    60.07         17.01               
Available for sale financial assets           0             0.00                
Long Term Receivables                         130.20        114.18              
                                                                                
Current assets                                                                  
Inventories                                   65.66         122.93              
Trade & Other Receivables                     653.45        716.02              
Cash & Cash Equivalents                       174.49        374.64              
                                             893.60        1,213.58             
Total assets                                  2,150.49      2,213.29            
Equity                                                                          
Capital & Reserves attributable to equity                                       
holders                                                                         
Share Capital                                 3.54          3.49                
Share Premium                                 231.53        231.53              
Revaluation Reserve                           0.73          47.35               
Exchange Difference                                         (7.46)              
Retained Earnings                             124.25        66.43               
360.05        341.34               
Minority Interest                             6.22          1.65                
Total equity                                  366.27        342.99              
Liabilities                                                                     
Non-Current Liabilities                                                         
Borrowing                                     141.74        318.86              
Deferred income tax liabilities               97.10         74.28               
Retired benefit obligation                                  0.00                
Provisions                                    10.80         9.46                
                                             249.64        402.60               
                                                                                
Current Liabilities                                                             
Trade & Other Payables                        561.35        353.35              
Current Income Tax Liabilities                22.55         25.67               
Borrowings                                    950.68        1,088.70            
                                                           1,467.71             
Total Liabilities                             1,784.22      1,870.32            
                                                                                
Total Equity & Liabilities                    2,150.48      2,213.29            
Consolidated Income Statement                                                   
for the full year ended 31 December 2009                                        
                                          2009            2008                  
                                          $`million       $`million             
Sales                                      2,283.56        2,686.54             
Cost of Sales                              (2,041.94)      (2,360.44)           
Gross Profit                               241.61          326.11               
Selling & Marketing Costs                  (50.65)         (61.11)              
Administrative Expenses                    (120.51)        (142.29)             
Other Operating Income                     79.45           15.35                
Operating Profit                                           138.59               
Shares of Profit  of Associates                            -                    
Net Finance Costs                          (55.39)         (47.13)              
Profit Before Taxation                     94.52           90.93                
Income Tax Expense                         (19.60)         (16.36)              
Profit After Expense                       74.92           74.58                
Attributable to:                                                                
Non-Controlling Shareholders               (0.99)          0.04                 
Equity Holders of the Company              75.91           74.54                
                                          74.92           74.58                 
The Group is organised into six main business divisions:                        
-   Exploration and production of oil and gas (E&P) is involved in the          
   exploration for and production of oil and gas through the acquisition        
   of rights in oil blocks on the Nigerian continental shelf and deep           
   offshore. The E&P segment of the business owns interest OML 56, OML 90,      
OML 123 and OML 134 and OPL 236 and OPL 278, amongst others.                 
-   Refining and Terminals is involved in the refining of crude and storage     
   and logistics for distribution of petroleum products. This division was      
   recently carved out of the downstream marketing business. It has             
initiated steps towards establishing a refinery at the Lekki Free Trade      
   Zone in Lagos.                                                               
-   Gas and power is involved in the distribution of natural gas through        
   its subsidiaries, Gaslink Nigeria Limited (GNL) and East Horizon Gas         
Company Limited (EHGC). GNL operates about 100kilometers Greater Lagos       
   natural gas distribution franchise and has connected over one hundred        
   industrial customers.  EHGC is constructing 128km natural gas pipeline       
   network to supply natural gas to United Cement Company (UNICEM) and          
other customers at Calabar, Eastern Nigeria. The Division also               
   incorporated Akute Power Limited that is building an Independent Power       
   Plant to supply electricity to LSWC.                                         
-   Energy services is involved in the provision of services such as            
drilling and completion fluids and solid control waste management; oil-      
   well cementing and other services to upstream companies. The Division        
   presently has five swamp rigs.                                               
-   Marketing division is involved in retailed and commercial sales of          
refined petroleum products with over 600 retail outlets in Nigeria and       
   West African countries.                                                      
-   Supply and Trading imports cargoes of petroleum products for sale to        
   marketing companies and other corporate bodies within and outside            
Nigeria.                                                                     
Below is the Group performance on a divisional basis for the full year ended    
31 December 2009:                                                               
                         Exploration &  Marketing  Supply &    Refining &       
Production                Trading     Terminals        
                         US$`m          US$`m      US$`m       US$`m            
Gross segment revenue     83             1,109      1,304       -               
Inter-segment revenue     -                         (325)       -               
Revenue                   83             1,109      979         -               
Operating (loss)/profit   58             42         38          -               
Finance costs - net       (22)           (6)        (17)        -               
Profit before income tax                                                        
Income tax expenses                                                             
Profit for the year                                                             
                         Gas & power   Energy      Corporate &  Total           
                                       Services    Others                       
US$`m         US$`m       US$`m        US$`m           
Gross segment revenue     71            42          -            2,529          
Inter-segment revenue     -             -                        (325)          
Revenue                   71            42          -            2,204          
Operating (loss)/profit   4             8           -            149            
Finance costs - net       2             (7)          (5)         (55)           
Profit before income tax                                         -              
Income tax expenses                                              (19)           
Profit for the year                                              75             
Below is the Group performance on a divisional basis for the full year ended    
31 December 2008:                                                               
             Exploration  Refining &   Gas &     Energy         Total           
&            marketing    power     services &                     
             production                          Group Office                   
             US$`000      US$`000      US$`000   US$`000        US$`000         
Gross segment 106,240      4,304,425    55,524    35,018         4,501,207      
revenue                                                                         
Inter-segment -            (1,814,663)  -         -              (1,814,663)    
revenue                                                                         
Revenue       106,240      2,489,762    55,524    35,018         2,686,544      
Operating     40,274       101,439      5,908     (9,030)        138,591        
(loss)/profit                                                                   
Finance costs (11,171)     (36,308)     (1,141)   1,488          (47,132)       
-net                                                                            
Profit before                                                    91,459         
income tax                                                                      
Income tax                                                       (16,346)       
expenses                                                                        
Profit for                                                       74,579         
the year                                                                        
Consolidated Statement of changes in Shareholder`s Equity Attributable to       
equity holders of the Company for the full year ended 31 December 2009          
Share    Share    Revaluation  Cumulative       
                                Capital  Premium  reserve      translation      
                                                               adjustment       
                                US$m     US$m     US$m         US$m             
Balance as at 31 December 2008   3.49     227.28   47.35        (3.21)          
Retained profit for the period                                                  
Bonus issue of shares                                                           
Dividend paid                                                                   
Exchange difference              (0.05)            (1.53)                       
Reversal of revaluation surplus                                                 
Deferred tax on revaluation                        (43.15)                      
surplus                                                                         
Share Issue/acquisition Cost              4.25                                  
Balance as at 31 December2009    3.54     231.53   2.67         (1.95)          
                                         Retained   Minority    Total           
                                         earnings   interest    equity          
US$m       US$m        US$m            
Balance as at 31 December 2008            66.43      1.65        342.99         
Retained profit for the period            75.91      (0.99)      74.59          
Bonus issue of shares                                                           
Dividend paid                             (18.39)                (18.39)        
Exchange Difference                       (0.30)                                
Reversal of revaluation surplus                                                 
Deferred tax on revaluation surplus                                             
Share Issue/acquisition Cost                         5.56                       
Balance as at 31 December2009             124.25     6.22        366.26         
Consolidated Statement of changes in Shareholder`s Equity Attributable to       
equity holders of the Company For the full year ended 31 December 2008          
Share    Share    Revaluation  Cumulative       
                                Capital  Premium  reserve      translation      
                                                               adjustment       
                                US$m     US$m     US$m         US$m             
Balance as at 31 December 2007   2.90     232.91   56.96        28.25           
Retained profit for the period                                                  
Bonus issue of shares            0.59     (0.59)                                
Dividend paid                                                                   
Exchange difference                                (6.29)       (22.10)         
Reversal of revaluation surplus                    (4.61)                       
Deferred tax on revaluation                        1.38                         
surplus                                                                         
Share Issue Cost                          (5.04                                 
Balance as at 31 December2008    3.49     227.28   47.50        6.15            
                                           Retained   Minority   Total          
                                           earnings   interest   equity         
US$m       US$m       US$m           
Balance as at 31 December 2007              53.74      1.61       376.35        
Retained profit for the period              74.23      0.03       74.27         
Bonus issue of shares                                                           
Dividend paid                               (70.82)    (0.48)     (71.30)       
Exchange Difference                                               (28.40)       
Reversal of revaluation surplus                                   (4.61)        
Deferred tax on revaluation surplus                               1.38          
Share Issue Cost                                                  (5.04)        
Balance as at 31 December2008               57.15      1.16       342.99        
Notes to reviewed results                                                       
1. General information                                                          
Oando (formerly Unipetrol Nigeria Plc) was registered by a 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.                                              
The principal activity of the Company locally and internationally is to have    
strategic investments in energy companies across West Africa. The Group is      
involved in the following business activities via its subsidiary companies:     
-   Marketing of petroleum products, manufacturing and blending of              
   lubricants - Oando Marketing Limited.                                        
-   Distribution of natural gas for industrial customers - Gaslink Nigeria      
   Limited.                                                                     
-   Supply and distribution of petroleum products - Oando Supply and            
   Trading, Nigeria and Oando Trading, Bermuda.                                 
-   Energy services to upstream companies - Oando Energy Services.              
-   Exploration and Production - Oando Exploration and Production.              
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 this Audited financial      
report for the full year of 2009.                                               
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 IFRIC    
10 (Issued 2006) Interim Financial Reporting and Impairment.                    
-   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.                                            
-   The Group obtained approval for its share option scheme from the            
   regulatory authority in February 2009. Accordingly all shared-based          
payment in operation has been subjected to and accounted for under IFRS      
   2 for the first time in 2008.                                                
-   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; and       
   -   accumulated amortisation as at 31 December 2002 has been eliminated      
       with a corresponding decrease in the cost of goodwill;                   
-   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 (EPS)                                                     
Basic 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.                                                              
2009    2008          
Profit attributable to equity holders of the Company ($`m) 75.91   74.54        
Average number of shares in issue (millions)               904.88  904.88       
Basic EPS (cents)                                          8.39    8.24         

Diluted                                                                         
Profit attributable to equity holders of the Company       75.91   74.54        
Weighted average number of shares in issue (millions)      904.88  904.88       
Adjustment for bonus issues                                                     
Weighted average number of shares for diluted EPS          904.88  904.88       
(millions)                                                                      
Diluted EPS (cents)                                        8.39    8.24         

Headline Earnings Per Share (HEPS)                         8.39    8.24         
Profit attributable to equity holders of the Company       75.91   74.54        
Adjusted for:                                                                   
Profit on sale of buildings associated with discontinued   0       0            
operations                                                                      
Profit/(Loss) on sale of other assets                      0       0            
Loss on sales of investment in affiliate companies         0       0            
Tax thereon                                                0       0            
HEPS attributable to earnings basis (cents)                8.39    8.24         
HEPS attributable to diluted earnings basis (cents)        8.39    8.24         
Net assets per share (cents)                               42      37           
Tangible assets per share (cents)                          140     110          
4. Independent audit by the auditors                                            
This condensed consolidated result has been audited by our auditors             
PricewaterhouseCoopers who perform their audit in accordance with the           
International Standards on Auditing.  The results have been reviewed by         
PricewaterhouseCoopers whose unqualified review opinion is available for        
inspection at the Company`s registered office.                                  
5. Post balance sheet events                                                    
There are no significant post balance sheet events that in the opinion of the   
directors will have a material impact on the accounts herein presented.         
For and on behalf of the Board                                                  
Mr J Adewale Tinubu                                                             
Group Chief Executive                                                           
19 March 2010                                                                   
Directorate:                                                                    
1  Major General M. Magoro (Rtd.) OFR, Galadiman    Chairman                    
Zuru                                                                          
2  Mr. J. A. Tinubu                                 Group CEO                   
3  Mr. O. Boyo                                      Deputy Group CEO            
4  Mr. B. Osunsanya                                 Group Exec. Director        
5  Mr. O. Adeyemo                                   Exec. Director              
6  Mr. A. Akinrele SAN                              Director                    
7  Chief S. Anthony                                 Director                    
8  Mr. Navaid Burney                                Director                    
9  HRM. Oba. A. Gbadebo CFR                         Director                    
10 Mr. O. Ibru                                      Director                    
11 Alhaji H. Mahmud, Walin Mubi                     Director                    
12 Mr. Onajite Okoloko                              Director                    
13 Ms. A. Pepple                                    Director                    
14 Ms. G. Sangudi                                   Director                    
Company Secretary: Mrs. Oredeji Delano                                          
Registered office: 2, Ajose Adeogun Street, Victoria Island, Lagos, Nigeria     
Auditors: PriceWaterhouseCoopers, Plot 252E Muri Okunola Street, Victoria       
Island, Lagos                                                                   
E-mail: info@oandoplc.com                                                       
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         
(Proprietary) Limited (Registration number: 2004/003647/07)                     
70 Marshall Street, Johannesburg, 2001. PO Box 61051, Marshalltown, 2107        
Sandton                                                                         
12 April 2010                                                                   
Sponsor: Deutsche Securities (SA) (Proprietary) Limited                         
Date: 12/04/2010 13:13:03 Supplied by www.sharenet.co.za                     
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