Oando reports $261m loss over naira devaluation
Indigenous energy group, Oando Plc, expects materially lower earnings for the second quarter of 2016 due to the impact of Naira devaluation against the US dollar by the Central Bank of Nigeria (CBN), the company announced yesterday.
Oando in a filing with the Nigerian Stock Exchange (NSE) said the impact of the Naira devaluation by the CBN is expected to amount to an unrealized foreign exchange loss arising from dollar denominated liabilities, outstanding bank trade facilities as well as vendor payables.
It said as at the time of the devaluation, the company had dollar denominated borrowings of $261m in Naira dominated earnings businesses, consisting of $68m in core loans, $89m in bank trade facilities, $83m in Asset Financing and $21m in other payables.
“A 40% devaluation in the value of the Naira against the US dollar from the bank rate of N199.00:$1.00 to N280.00:$1.00, has effectively resulted in these significant foreign exchange losses which we have prudently booked into our financial statements,” the statement said.
The firm reiterated its focus of returning to profitability despite the challenging operating landscape in 2016.
Oando assured that it will grow its dollar earning higher margin upstream and export trading businesses, which it said will not be impacted by the volatility of Foreign Exchange rates to the Naira.