OANDO PLC - Announces H1 2016 Results, Posts N212 Billion Top Line Revenue

Announces H1 2016 Results, Posts N212 Billion Top Line Revenue

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”)




Oando PLC Announces H1 2016 Results, Posts N212 Billion Top Line Revenue

Lagos, Nigeria – Oando PLC (referred to as “Oando” or the “Group”), Nigeria’s leading
indigenous energy group listed on both the Nigerian and Johannesburg Stock Exchange,
today announced unaudited results for the six months period ended 30 June, 2016, with the
following highlights:

Financial Highlights:

    -   Turnover increased by 18%, N212.0 billion compared to N180.0billion (H1 2015)
    -   Gross Profit decreased by 49%, N19.0 billion compared to N37.1 billion (H1 2015)
    -   Loss-After-Tax decreased by 23%, (N27.0 billion) compared to (N35.0 billion) (H1
        2015)
    -   One-off unrealized foreign exchange losses of N28.6 billion from dollar denominated
        liabilities as a result of currency devaluation
    -   Refinancing of debt through N108 billion Medium Term Note, including the
        conversion of a substantial portion of the dollar denominated debt into Naira.

Operational Highlights:

Upstream:

       Oando Energy Resources (OER) through its 81.5% held subsidiary, Equator
      -  Exploration Ltd, successfully farmed out 65% participating interest in blocks 5 and
        12 in the Exclusive Economic Zone of the Democratic Republic of Sao Tome and
        Principe.

Midstream:

    -   Oando Gas & Power achieved 55% completion of the Central Horizon Gas Company
        (CHGC) 8.5km pipeline expansion.
    -   200% subscription of gas capacity in the 20 mmscf/day Mini LNG plant development
        in Ajaokuta, Kogi State.

Downstream:

    -   Oando PLC concluded $210 million recapitalization and partial divestment of Oando
        Downstream.
As the global economic challenges persist, Oando has been duly affected as a result of the
new reality in international commodity prices of ~$50/barrel and the operating challenges in
the Niger Delta that have occasioned a 25% reduction in daily production volumes from
~56kboepd H1, 2015 to 45kboepd H1, 2016. The devaluation of the Naira by the Central
Bank of Nigeria in Q2, 2016, from an average exchange rate of N199.00:$1.00 to above
N280.00:$1.00, has resulted in unrealized foreign exchange losses due to our dollar
denominated liabilities. We have taken action by converting $133 million liabilities on our
books to N38.6 billion which are currently being serviced by naira, hence leaving only dollar
denominated liabilities to be serviced by our dollar earnings. In the period under review we
have executed 70% of our asset disposal target and 100% of our refinancing target and are
poised to return the business to profitability by year end 2016.

Commenting, Mr. Wale Tinubu, Group Chief Executive, Oando PLC said: “The first half of
the year has attested to the deplorable state of security in the oil & gas environment in
Nigeria, having experienced a 25% decline in production volumes arising from the increased
disruptions from militant activities. On a positive note the company has benefitted from the
implementation of the oil price hedge, which has helped to calm the effects of the disruption
of production activities and aided in the rapid pay down of the $900 million of Upstream
related liabilities at the time of the Conoco Philips Acquisition, to $440 million today. We are
pleased to have received $210 million into our downstream group representing 70% of our
asset disposal plans and also concluded the restructuring of our debt through the N108
Billion medium term note. Now that the dollar liquidity position in the country has improved,
we have limited the risk of exchange rate volatility by converting a substantial portion of our
dollar denominated obligations to naira, thereby matching our dollar liabilities to our dollar
generating businesses. We reiterate our forward looking business model of a focused
upstream and export trading businesses, which will drive profitability through consistent
dollar earnings”.

Operational Update

Oando PLC successfully restructured its debt through a N108 billion Medium Term Note with
lower capital costs circa 15% and a renewed 5 year tenor.

Oando Energy Resources (OER) through its 81.5% held subsidiary, Equator Exploration Ltd,
successfully farmed out 65% participatory interests in Block 5 and Block 12 in the exclusive
economic zone of the Democratic Republic of Sao Tome and Principe to Kosmos Energy
Sao Tome. The farm out leaves the company with a 20.0% and 22.5% interests in Block 5
and 12 respectively. This is evidence of our ability to partner with a world renowned
Exploration Company, with an impressive track record of finding and developing large oil and
gas resources at a more successful rate than industry standards.

Oando Gas & Power (OGP) as at H1 2016, achieved 55% completion of the Central Horizon
Gas Company pipeline expansion project, the pipeline, which is set to be completed in Q4
2016, and will increase the throughput capacity by 400%, thereby providing increased supply
of gas in the South-East region of Nigeria. The 20mmscf/d Mini LNG Plant in Ajaokuta has
already received an overwhelming 200% subscription, fully contracting the total planned
capacity, Oando Gas & Power commenced development plans for a replica 20mmscf/d Mini
LNG Plant in Onne Port-Harcourt, which will provide alternative gas/power solutions for the
South East region of Nigeria, further expanding our footprint nationwide. The unrest in the
Niger Delta has led to increased disruption in the nations gas supply, in response to this
development, we have put out an expression of interest for the supply of LNG through
Floating Storage and regasification Units (FSRUs), mobile/modular onshore Liquefied
Natural Gas (LNG) and other similar solutions. This will provide an alternative source of gas
to ensure the nation is adequately powered and supported.
In July 2016, Oando PLC successfully concluded recapitalization and partial divestment of
Oando Downstream for $210 million, the net cash proceeds of the transaction have been
used to reduce a significant portion of the debt on the group balance sheet. This partnership
which has been renamed OVH Energy is positioned to revolutionize Nigeria’s downstream
sector and create one of Africa’s largest downstream operations. We are excited to reap the
successes and returns this new business will deliver.



.

For further information, please contact:

Tokunboh Akindele

Head, Investor Relations
2, Ajose Adeogun Street,
Victoria Island,
Lagos,Nigeria.
Tel: +234 (1) 270400,Ext 6396
aakindele@oandoplc.com

2 August 2016

Nigeria



Sponsor: Sasfin Capital (a division of Sasfin Bank Limited)

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