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Oao - Oando Plc - Unaudited Results For The Period Ended 30 September 2011

Release Date: 25/10/2011 11:30:02      Code(s): OAO
OAO - Oando Plc - Unaudited results for the period ended 30 September 2011      
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")                                       
Unaudited results for the period ended 30 September 2011                        
Highlights                                                                      
-   Turnover of US$2,545.78 million                                             
-   Gross profit of US$322.12 million                                           
-   Operating profit of US$153.73 million                                       
-   Profit after tax of US$65.98 million                                        
-   Attributable profit after tax of US$65.55 million                           
-   Earnings per share of 2.90 cents                                            
-   Increased gross margin contribution by the gas and power division           
-   Operation of the second rig during the period                               
                                                                                
Review of results                                                               
Oando, which has a primary listing on the Nigerian Stock Exchange ("NSE") and   
a secondary listing on the Main Board of the JSE Limited ("JSE"), reports       
unaudited profit after tax ("PAT") for the period ended 30 September 2011 of    
US$65.98 million.                                                               
Statement of comprehensive income analysis                                      
The Group`s turnover and profit before tax increased by 36% and 34%             
respectively, when compared with the same period in 2010. The following are     
key highlights of the period`s performance:                                     
Turnover                                                                        
Turnover increased by 36% compared to the prior corresponding period in 2010.   
This was attributable to the following:                                         
    -    12.15MW Akute Power Plant being operated for nine months in 2011       
         compared to seven months during the prior comparitive period in        
2010;                                                                  
    -    Additional customers being connected to Gaslink pipeline network;      
    -    Additional revenue arising from favourable oil prices                  
         (approximately 24%); and                                               
-    Increased petroleum products imports as a result of seamless           
         operation of the sovereign debt scheme for fuel subsidy.               
Gross margin                                                                    
An increase in gross margin by 10% relative to the prior comparative period     
in 2010, as a result of:                                                        
    -    Significant reduction in payment cycles for products imported on       
         behalf of the Government of Nigeria post the implementation of the     
         Sovereign Debt Note of the Government of Nigeria; and                  
-    Increased contribution from the higher margin businesses (Midstream    
         and Upstream).                                                         
Administrative expenses                                                         
Administrative expenses increased by 11% to the prior comparative period in     
2010, due to:                                                                   
    -    Additional operating costs (including depreciation) incurred on new    
         businesses (rig and independent power plant);and                       
    -    Higher inflationary pressures on major cost items including wages.     
Selling and marketing expenses                                                  
Selling and marketing expenses increased by 4% to the prior comparative         
period in 2010, due to higher volumes of petroleum products transported to      
upcountry locations during 2011.                                                
Finance costs                                                                   
Finance costs decreased by 14% to the prior comparative period in 2010, due     
to:                                                                             
    -    The reduced debt burden as a result of the  pay-down from the          
proceeds of the 2010 rights issue; and                                 
    -    The impact of a 400bps reduction of the medium term loan coupon as     
         a result of restructuring the loan.                                    
Statement of financial position analysis                                        
Property, plant and equipment                                                   
Property, plant and equipment increased by 1% to the prior comparative period   
in 2010 as a result of:                                                         
    -    Additional capital expenditure on Oil Mining Licence ("OML") 90,       
OML 56, and the refurbishment of the third rig in preparation for      
         operational deployment in 2011; and                                    
    -    The revaluation surplus arising from the triennial revaluation of      
         property, plant and equipment. The revaluation was carried out in      
December 2010.                                                         
Long term receivables                                                           
Long term receivable (cost of gas distribution pipeline assets) increased by    
32% to the prior comparative period in 2010, due to additional capital          
expenditure incurred on the East Horizon`s Gas pipeline project as well as      
new customers` connection to the Greater Lagos distribution network.            
Inventory                                                                       
Inventory for the period increased by 47% to the prior comparative period in    
2010, due to more cargoes of imported petroleum products being received         
towards the end of September 2011, by the Supply and Trading division.          
Trade and other receivables                                                     
Trade and other receivable increased by 26% to the prior comparative period.    
This is attributable to additional receivables generated from new businesses    
(power plant, rig).                                                             
Prospects                                                                       
Oando expects that the Federal legislature will pass the Petroleum Industry     
Bill ("PIB") in the near future. As a local company with a diversified          
portfolio, the passing of the PIB is expected to influence the availability     
of viable opportunities. The Group has positioned itself to optimise the        
additional value to be created by the proposed improvements in the Petroleum    
Industry`s policy framework.                                                    
The upstream assets portfolio is undergoing a restructuring to enhance the      
portfolio`s efficiency and ability to mobilise the required capital for         
growth. It is expected that these structural changes will be concluded before   
the end of 2011. The development of OML 90 is ongoing, while additional wells   
are to be drilled in OML 56 and 125. The strategy to acquire producing or       
near term assets is still being pursued. The proposed activities are intended   
to improve the contribution by the upstream business to the Group`s             
profitability in the future.                                                    
The Group will continue to connect new customers to the 100 kilometre Greater   
Lagos gas distribution network until the available capacity is exhausted.       
Construction work at the Eastern Horizon Company`s 128 kilometre pipeline       
project has been completed and is undergoing quality control testing pending    
commissioning.  The project is expected to commence revenue generation within   
the next few weeks. The Group is also pursuing captive power plant mandates     
for which bids had been submitted earlier this year.                            
The Federal Government of Nigeria has reopened discussions with stakeholders    
about deregulation of the downstream sector of the petroleum industry. The      
Marketing and Supply & Trading Divisions have strategically positioned          
themselves to take advantage of the opportunities associated with               
deregulation. The Supply & Trading division will continue to consolidate its    
foray into the West African markets. The Company shall continue to improve      
and capitalise on operational efficiencies of the downstream marketing          
businesses.                                                                     
The Energy Services business will complete ongoing refurbishment of the third   
rig which is expected to be deployed into operational use before the end of     
the 2011 financial year.                                                        
In light of the above, the Group is poised to deliver enviable returns to the   
Company`s stakeholders.                                                         
Condensed consolidated statements of financial position as at 30 September      
2011                                                                            
                                    30 September 2011 31 December  2010         
ASSETS                               US$`million       US$`million              
Non-current assets                                                              
Property Plant & Equipment           1,058.93          1,043.92                 
Intangible Assets                    153.83            164.22                   
Available for sale investment        0.01              0.01                     
Deferred income tax assets           25.14             75.88                    
Long Term Receivables                211.13            160.43                   
                                    1,449.04          1,444.46                  
Current assets                                                                  
Inventories                          221.07            150.54                   
Trade & Other Receivables            662.08            523.63                   
Cash & Cash Equivalents              127.21            81.91                    

Total assets                         2,459.40          2,200.54                 
Equity                                                                          
Capital & Reserves attributable to                                              
equity holders                                                                  
Share Capital                        7.34              6.59                     
Share Premium                        318.25            361.52                   
Other Reserves                       109.58            77.06                    
Retained Earnings                    203.11            180.50                   
                                    638.28            625.67                    
Minority Interest                    8.90              6.81                     
Total equity                         647.18            632.48                   

Liabilities                                                                     
Non-Current Liabilities                                                         
Borrowing                            620.27            503.11                   
Deferred income tax liabilities      42.82             104.60                   
Provisions for liabilities and       34.03             21.85                    
charges                                                                         
                                    697.12            629.56                    
Current Liabilities                                                             
Trade & Other Payables               404.34            423.74                   
Current Income Tax Liabilities       27.39             37.16                    
Borrowings                           683.37            477.60                   
Total Liabilities                    1,812.22          1,568.06                 
                                                                                
Total Equity & Liabilities           2,459,40          2,200.54                 
Consolidated statement of comprehensive Income for the period ended 30          
September 2011                                                                  
                                  30 September 2011  30 September 2010          
                                  US$`million        US$`million                
Sales                              2,545.78           1,872.63                  
Cost of Sales                      (2,223.65)         (1,578.52)                
Gross Profit                       322.13             294.11                    
Selling & Marketing Costs          (36.89)            (35.32)                   
Administrative Expenses            (179.09)           (161.40)                  
Other Operating Income             47.59              29.42                     
Operating Profit                   153.73             126.81                    
Net Finance Costs                  (28.05)            (32.69)                   
Profit Before Taxation             125.68             94.12                     
Income Tax Expense                 (59.70)            (43.08)                   
Profit After Expense               65.98              51.04                     
Attributable to:                                                                
Non-Controlling Shareholders       65.55              50.72                     
Equity Holders of the Company      0.43               0.32                      
                                                                                
The Group is organised into six main business divisions:                        
-   The Exploration and production of oil and gas business ("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 several        
   interests in OML 56, OML 90, OML 125 and OML 134 as well as Oil              
Prospecting Licence ("OPL") 236 and OPL 278, amongst others.                 
-   The Refining and Terminals business is involved in the refinement of        
   crude and storage and logistics for distribution of petroleum products.      
   This business 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.                                              
-   The Gas and power business is involved in the distribution of natural       
   gas through its subsidiaries, Gaslink Nigeria Limited ("GNL") and East       
Horizon Gas Company Limited ("EHGC"). GNL operates approximately 100         
   kilometers of Greater Lagos natural gas distribution franchise and has       
   connected over one hundred industrial customers.  EHGC is constructing       
   a 128 kilometers natural gas pipeline network to supply natural gas to       
United Cement Company ("UNICEM") and other customers at Calabar and          
   Eastern Nigeria. The Gas and power business also incorporated Akute          
   Power Limited that is building an Independent Power Plant to supply          
   electricity to Lagos State Water Corporation ("LSWC").                       
-   The Energy services business 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 Energy services business presently has five swamp rigs.       
-   The Marketing business is involved in retailed and commercial sales of      
   refined petroleum products with over 600 retail outlets in Nigeria and       
   West African countries.                                                      
-   The Supply and trading business 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 nine months        
period ended 30 September 2011:                                                 
Exploration  Marketing     Supply &     Refining &       
                       &                          Trading      Terminals        
                       Production                                               
                       US$`million  US$`million   US$`million  US$`million      
Gross segment revenue   138.13       892.75        1,661.67     -               
Inter-segment revenue   -            (2.32)        (283.17)     -               
Revenue                 138.13       890.43        1,378.50     -               
Operating               79.66        28.40         15.55        -               
profit/(loss)                                                                   
Finance costs - net     (15.70)      0.17          (1.04)       -               
Profit before income     63.95        28.57         14.51       -               
tax                                                                             
Income tax expenses     (42.05)       (9.11)       (1.84)       -               
Profit for the period   21.90         19.46         12.67       -               
                       Gas & power  Energy        Corporate &  Total            
                                    Services      Others                        
US$`million  US$`million   US$`million  US$`million      
Gross segment revenue   71.95        66.76         44.38        2,875.64        
Inter-segment revenue     -          -             (44.38)      (329.87)        
Revenue                 71.95        66.76          -           2,545.77        
Operating               15.54        20.53         (5.94)       153.73          
profit/(loss)                                                                   
Finance income/(costs)  1.83         (20.90)        7.60        (28.05)         
- net                                                                           
Profit before income     17.37        (0.37)        1.66        125.68          
tax                                                                             
Income tax expenses      (5.27)       0.12          (1.54)      (59.70)         
Profit for the year      12.10           (0.25)      0.12        65.98          
Below is the Group performance on a divisional business basis for the nine      
months period ended 30 September 2010:                                          
                       Exploration  Marketing     Supply &     Refining &       
                       &                          Trading      Terminals        
Production                                               
                       US$`million  US$`million   US$`million  US$`million      
Gross segment revenue   98.14        846.79        1,506.94     -               
Inter-segment revenue      -            -          (734.28)     -               
Revenue                 98.14        846.79        772.66       -               
Operating               51.05        28.53         16.64        -               
profit/(loss)                                                                   
Finance costs - net     (22.58)      (4.90)        10.41        -               
Profit before income    28.47        23.63         27.05                        
tax                                                                             
Income tax expenses     (22.82)      (7.55)        (5.23)                       
Profit for the year                       16.08         21.82                   
5.65                                                     
                       Gas & power  Energy        Corporate &  Total            
                                    Services      Others                        
                       US$`million  US$`million   US$`million  US$`million      
Gross segment revenue   85.15        69.89         -            2,606.91        
Inter-segment revenue                                           (734.28)        
Revenue                 85.15        69.89           -          1,872.63        
Operating profit/(loss) 9.74         28.96           (8.11)     126.81          
Finance costs - net     2.71         (23.66)         5.33       (32.69)         
Profit before income    12. 45       5.30           (2.78)      94.12           
tax                                                                             
Income tax expenses        (3.40)      (1.73)        (2.00)     (43.08)         
Profit for the year                        3.57                 51.04           
                       9.05                       (5.13)                        
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER`S EQUITY ATTRIBUTABLE TO       
EQUITY HOLDERS OF THE COMPANY FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER     
2011                                                                            
                          Share       Share       Other        Cumulative       
                          Capital     Premium     reserves     translation      
                                                               adjustment       
US$million  US$million  US$million   US$million       
Balance as at 31 December  6.59        361.52      77.07        -               
2010                                                                            
Retained profit for the    -           -           -            -               
period                                                                          
Bonus issue of shares      1.50        -           -            -               
Dividend paid              -           -           -            -               
Exchange difference        (0.75)      (43.27)     32.51        -               
Reversal of revaluation    -           -           -            -               
surplus                                                                         
Deferred tax on            -           -           -            -               
revaluation surplus                                                             
Share issue/acquisition    -           -           -            -               
Cost                                                                            
Balance as at 30           7.34        318.25      109.58                       
September 2011                                                                  
Retained   Minority    Total           
                                         earnings   interest    equity          
                                         US$million US$million  US$million      
Balance as at 31 December 2010            180.50     6.81        632.49         
Retained profit for the period            65.55      0.43        65.98          
Bonus issue of shares                     (1.5)      -           0              
Dividend declared/paid                    (35.89)    -           (35.89)        
Exchange Difference                       (5.55)     1.66        (15.40)        
Reversal of revaluation surplus           -          -           -              
Deferred tax on revaluation surplus       -          -           -              
Share Issue/acquisition Cost              -          -           -              
Balance as at 30 September 2011           203.11     8.90        647.18         
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER`S EQUITY ATTRIBUTABLE TO       
EQUITY HOLDERS OF THE COMPANY FOR THE NINE MONTHS PERIOD ENDED 30 SEPTEMBER     
2010                                                                            
                         Share        Share       Revaluation  Cumulative       
Capital      Premium     reserve      translation      
                                                               adjustment       
                         US$million   US$million  US$million   US$million       
Balance as at 31          3.54         231.66      39.84        (39.12)         
December 2009                                                                   
Retained profit for the   -            -           -            -               
period                                                                          
Bonus issue of shares     -            -           -            -               
Dividend paid             -            -           -            -               
Exchange difference       1.5          (33.11)     8.47         39.12           
Reversal of revaluation   -            -           -            -               
surplus                                                                         
Deferred tax on           -            -           -            -               
revaluation surplus                                                             
Share Issue/acquisition   1.02         130.44      -            (0.13)          
Cost                                                                            
Balance as at 30          6.06         328.99      48.31        0               
September 2010                                                                  
                                         Retained   Minority    Total           
                                         earnings   interest    equity          
US$million US$million  US$million      
Balance as at 31 December 2009            124.56     6.22        366.70         
Retained profit for the period            50.72      0.32        51.04          
Bonus issue of shares                     -          -           -              
Dividend paid                             (45.02)    -           (45.02)        
Exchange Difference                       -          0.10        16.08          
Reversal of revaluation surplus           -          -           -              
Deferred tax on revaluation surplus       -          -           -              
Share Issue/acquisition Cost              -                      131.46         
Balance as at 30 September 2010           130.26     6.76        520.39         
Notes to reviewed results for the nine months ended 30 September 2011           
1. General information                                                          
Oando 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    
2000 consequent to the sale of the 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% of 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            
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 via Oando Marketing Limited.                                      
-   Distribution of natural gas for industrial customers via Gaslink            
   Nigeria Limited.                                                             
-   Supply and distribution of petroleum products via Oando Supply and          
   Trading, Nigeria and Oando Trading, Bermuda.                                 
-   Energy services to upstream companies via Oando Energy Services.            
-   Exploration and Production via 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 periods 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.                                                                       
The Group adopted the IFRS below, which are relevant to its operations. These   
have been consistently applied in this unaudited financial report for the       
period ended 30 September 2011.                                                 
IAS 1 (amendment January 2010) Presentation of financial statements             
IAS 2 (revised 2003) Inventories                                                
IAS 7 (issued 2010) Statement of cash flows                                     
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 2009) 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  amendment effective 2010) Intangible Assets               
IAS 39 (revised 2003) financial instruments: Recognition and measurement        
IFRS 2 (issued 2004) Share-based payments and amendment effective January       
2010                                                                            
IFRS 3 (revised 2009) Business Combinations                                     
IFRS 5 (issued 2004 and amendment effective 2010) Non-current Assets Held for   
Sale and Discontinued                                                           
IFRIC 9 (revised 2009) Reassessment of Embedded derivatives                     
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 Generally Accpeted Accounting Principles ("GAAP"), the       
   revaluation surplus included in equity in respect of an item of              
property, plant and equipment were transferred to 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.                     
-   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 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             
statement of comprehensive income, 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 statement of comprehensive income as        
  part of the gain or loss on sale.                                             
3. Earnings Per Share                                                           
Basic earnings per share("EPS") are 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.                                    
                                       30 September      30 September           
                                       2011             2010                    
Profit attributable to equity holders   65.55            50.72                  
of the Company (US$`million)                                                    
Weighted average number of shares in    2,262.71         1,659.32               
issue (millions)                                                                
Basic EPS (cents)                       2.90             3.06                   
                                                                                
Diluted                                                                         
Profit attributable to equity holders   65.55            3.06                   
of the Company (US$`million)                                                    
Weighted average number of shares in    2,262.71         1,659.32               
issue (US$millions)                                                             
Adjustment for bonus issues                                                     
Weighted average number of shares for   2,262.17         1,659.32               
diluted EPS (US$millions)                                                       
Diluted EPS (cents)                     2.90             3.06                   
                                                                                
Headline Earnings Per Share             2.90             3.06                   
("HEPS")(cents)                                                                 
Profit attributable to equity holders   65.55            50.72                  
of the Company (US$`million)                                                    
Adjusted for:                                                                   
Profit on sale of buildings associated  0                0                      
with discontinued operations                                                    
Profit/(Loss) on sale of other assets   0                0                      
Loss on sales of investment in          0                0                      
affiliate companies                                                             
Tax on sales of investment in           0                0                      
affiliate companies                                                             
HEPS attributable to earnings basis     2.90             3.06                   
(cents)                                                                         
HEPS attributable to diluted earnings   2.90             3.06                   
basis (cents)                                                                   
Net assets per share (cents)            108.71           123.24                 
Tangible assets per share (cents)       46.77            55.39                  
4. Independent audit by the auditors                                            
The condensed consolidated unaudited results for the period ended 30            
September 2011 has not been reviewed or reported on by the Group`s auditors,    
PricewaterhouseCoopers.                                                         
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.         
6. Notes                                                                        
-    The average numbers of ordinary shares of 2,274,118,138 include the        
    bonus issue of 452,542,314 ordinary shares which the shareholders           
approved at the Annual General Meeting ("AGM") on 30 June 2011.             
-    Certain comparative balances (admin expenses - gratuity) have been         
    restated based on subsequent events after 30 September 2010.                
Directorate:                                                                    
1   HRM. Oba Michael M. Adedotun Aremu Gbadebo,     Chairman                    
  CFR                                                                           
2   Mr. Jubril Adewale Tinubu                       Group CEO                   
3   Mr. Omamofe Boyo                                Deputy Group CEO            
4   Mr. Mobolaji Osunsanya                          Group Exec. Director        
5   Mr. Olufemi Adeyemo                             Exec. Director              
6   Mr. Oghogho Akpata                              Director                    
7   Chief Sena Anthony                              Director                    
8   Ms. Nana Afoah Appiah-Korang                    Director                    
                                                                                
For and on behalf of the Board                                                  
Mr J Adewale Tinubu                                                             
Group Chief Executive                                                           
25 October 2011                                                                 
Company Secretary: Ms. Ayotola Jagun                                            
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 Transfer Secretary: Computershare Investor          
Services (Proprietary) Limited (Registration number: 2004/003647/07)            
70 Marshall Street, Johannesburg, 2001. PO Box 61051, Marshalltown, 2107        
Sandton                                                                         
25 October 2011                                                                 
JSE Sponsor                                                                     
Macquarie First South Capital (Pty) Limited, The Place, 1 Sandton Drive,        
South Wing, Sandton, Johannesburg, 2196, South Africa                           
Date: 25/10/2011 11:30:01 Supplied by www.sharenet.co.za                     
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