Oando re­ports $261m loss over naira de­val­u­a­tion

Daily Trust - - BUSINESS - By Daniel Adugbo

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.

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