Impressive Results Lift Oando’s Share Price by 18%
Shares in Oando Plc rose 18 per cent last week as investors reacted positively to the 2016 financial results of the company. After recording losses for two years, Oando Plc bounced back to profitability in 2016. Reacting to this development, some investors increase demand for the stock, lifting its price by 18 per cent from N5.00 to N5.90 last week.
Oando posted a turnover of N569 billion in 2016, which is 49 per cent higher than the N455.7 billion recorded in 2016. Earnings before interest, tax, depreciation and amortisation increased by 51 per cent from N47 billion to N71 billion, while PAT stood at N3.5 billion, compared with a loss of N47.6 billion in 2015.
Commenting on the results, Group Chief Executive, Oando Plc, Mr. Wale Tinubu, said: “2016 saw the country plunge into a recession, the first in over 2 decades, besieged with liquidity constraints, devaluation of the naira and a slump in oil earnings due to low oil prices intensified by the insurgency in the Niger Delta. We were proactive in the timely execution of our restructuring program of Growth in our upstream division; deleverage, through divestments resulting in a net debt reduction of N125 billion; and profitability by focusing on dollar denominated earnings.”
Tinubu said that in the midstream they concluded the partial divestment of Oando Gas and Power (OGP) to Helios Investment Partners to further expand the company’s gas footprint.
“In the downstream our trading business continued to make in-roads in crude lifting. As we enter a new phase in our business evolution we are optimistic about 2017 and look forward to even more successes having braved the challenges of 2016,” he said.
According to him, in the fiirst quarter of 2016 the company successfully restructured its existing obligations through a N108 billion Medium Term facility with a syndicate of nine leading local banks. It also completed the full divestment of its Upstream Services business (Oando Energy Services) and the recapitalisation of its downstream business to Helios Investment Partners, a premier Africa-focused private investment firm and the Vitol Group, the world’s largest independent trader of energy commodities to the tune of $210 million.
“The recapitalisation of Oando’s downstream operations represents the largest inflow of foreign capital in a single transaction in the oil and gas sector in 2016. This strategic initiative is positioned to revolutionize Nigeria’s downstream sector and create one of Africa’s largest downstream operations. In furtherance of Oando being the partner of choice to foreign investors, the company concluded 2016 with the partial divestment of its midstream business, Oando Gas & Power Limited to Helios Investment Partners, a premier Africa-focused private investment firm for $115.8 million,” he said.