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Oando PLC Announces FYE 2018 Results, Posts N28.8 Billion Profit-After-Tax
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 FYE 2018 Results, Posts N28.8 Billion Profit-After-Tax
Lagos, Nigeria – 1 April, 2019; Oando PLC (referred to as “Oando” or the “Group”), Nigeria’s
leading indigenous energy group listed on both the Nigerian and Johannesburg Stock
Exchange, has announced its audited results for the twelve months period ended December 31,
2018.
Commenting on the results Wale Tinubu, Group Chief Executive, Oando PLC said:
“Our 2018 results demonstrate the solid foundation we have built across volatile commodity price
cycles, and our ability to deliver profitability despite a challenging local operating environment.
Over the last few years, we have developed a reliable platform for future growth through the
execution of a corporate strategy designed to streamline our operations, reduce our debt and
optimize our asset portfolio. Our asset base is delivering strong free cash flows as evidenced by
a 70% reduction in our Upstream Borrowings since the closure of our landmark acquisition of
ConocoPhillips’s Nigerian asset in 2014. We remain confident in our ability to deliver significant
value to shareholders in the years ahead as well as resuming our dividend payments”.
RESULTS HIGHLIGHTS
Strong top and bottom line performance
• Turnover increased by 37%, N679.5 billion compared to N497.4 billion (FYE 2017), driven
by higher commodity prices and higher oil production.
• Gross Profit increased by 9%, N96.3 billion compared to N88.1 billion (FYE 2017)
• Profit-After-Tax increased by 46%, N28.8 billion compared to N19.8 billion (FYE 2017)
Optimized balance sheet
• Total Group Borrowings decreased by 11%, N210.9 billion compared to N237.4 billion (FYE
2017) while Long Term Group Borrowings decreased by 23%, N76.8 billion compared to N
99.6 billion (FYE 2017).
OPERATIONS REVIEW
Upstream:
Production for the twelve months ended 31 December 2018:
FYE 2018 FYE 2017 % Change
Crude Oil (bbls/day) 16,967 15,492 10%
NGLs (boe/day 3,134 3,430 -9%
Natural Gas (mcf/day) 19,922 21,266 -6%
Total (boe/day) 40,023 40,188 0%
During the twelve months ended December 31, 2018, production was in line with prior year at
40,023boe/day, compared with 40,188boe/day in the same period of 2017. Oil production in
particular increased by 10% from 15,492bbls/day in 2017 to 16,967bbls/day in 2018.
Working interest 2P Reserves, as assessed by an independent reserves evaluator, stood at
479.8mmboe as at December 31, 2018 compared to 470.7mmboe in the comparative prior year
period. This represents an increase in overall 2P reserves of 2% year on year in line with the
Group’s reserve replacement ratio.
Capital expenditure of $104.9 million (N38.0 billion) were incurred in the twelve months of 2018
compared to $55.0 million (N17.1 billion) in same period in 2017. This consists of $109.2 million
(N39.5 billion) at OMLs 60 to 63, $0.5 million (N181 million) at Qua Ibo, $5.7 million (N2.1 billion)
write-back at OML 56, and $0.9 million (N325.8 million) on other exploration assets.
Downstream:
Traded volumes for the twelve months ended 31 December 2018
Product Traded Volumes
Crude Oil (bbls) 14,187,897
Refined Products (MT) 739,876
In 2018, Oando Trading traded over 14 million barrels of crude oil under various contracts with
the Nigerian National Petroleum Corporation (NNPC) as well as delivering 739,876 MT of refined
products, acting as a key source of liquidity to the Oando Group. Oando Trading continues to
solidify its relationships with leading international and local banks, maintaining a sizeable and well
diversified structured Trade Finance facilities required to support future growth.
FINANCE REVIEW
N Million (unless otherwise stated) FYE 2018 FYE 2017 % Change
Revenue 679,465 497,423 37%
Gross Profit 96,274 88,081 9%
Profit-After-Tax 28,798 19,773 46%
Total Borrowings 210,901 237,442 -11%
Average Realized Oil Price (US$/bbl) 69.44 52.10 33%
Average Realized Gas Price (US$/mcf) 1.76 1.39 27%
Average Realized NGL Price (US$/boe) 9.15 9.48 -4%
Revenue
Revenue for the period was N679.5 billion, an increase of 37% compared to the same period in
2017 (N497.4 billion). This was primarily driven by an increase in commodity prices and higher oil
production.
In the twelve months to December 31, 2018, gross sales price for oil increased by 33% to
$69.44/bbl from $52.10/bbl in the same period in 2017. Sale price for natural gas increased by
27%, whilst NGL declined by 4%.
Gross Profit
Gross Profit for the period was N96.3 billion, an increase of 9% compared to the same period in
2017 (N88.1 billion). The increase is primarily driven by higher revenue as a result of higher
commodity prices and higher oil production.
Profit-After-Tax
Profit-After-Tax for the period was N28.8 billion, an increase of 46% compared to the same period
in 2017 (N19.8 billion). This was primarily driven by higher revenue as well as income tax credits.
Borrowings
Total Group Borrowings for the period stood at N210.9 billion, an 11% decrease from FYE 2017
(N237.4 billion) whilst in our upstream specifically, our borrowings reduced by 21% to $255.6
million compared to $324.6 million in FYE 2017. Since FYE 2014, the Group has reduced its debt
by 55% from N473.3 billion while our upstream borrowings have reduced by approximately 70%
from $801.6 million in 2014 to $260 million (FYE 2018).
LOOK AHEAD
Brent averaged $62 per barrel in the first quarter of 2019, with room for a further upside supported
by OPEC’s 1.2 million b/d cut. Our upstream business will continue to pursue production growth
initiatives through strategic alliances, whilst ensuring operational efficiency and fiscal prudence.
Our Trading business will continue to solidify its position in Nigeria and carry out growth initiatives,
whilst exploring opportunities for expansion across Africa.
The Group as a whole remains focused on driving profitability via growth in our upstream business
and achieving further reduction of borrowings to ensure value accretion to shareholders.
For further information, please contact:
Ayotola Jagun
Company Secretary
The Wings Office Complex
17a Ozumba Mbadiwe Avenue
Victoria Island,
Lagos, Nigeria.
Tel: +234 (1) 270400, Ext 6159
ajagun@oandoplc.com
Segun Awodele
Head, Investor Relations
The Wings Office Complex
17a Ozumba Mbadiwe Avenue
Victoria Island,
Lagos, Nigeria.
Tel: +234 (1) 270400, Ext 6204
sawodele@oandoplc.com
For: Oando PLC
Ayotola Jagun
Chief Compliance Officer & Company Secretary
1 April 2019
Nigeria
Sponsor: Sasfin Capital (a member of the Sasfin Group)
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