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Oando Bounces Back with N32.9 Billion Profit-After-Tax in 2021 After Previous Loss

Oando Plc, an energy group, has released its audited financial results for the period ending December 31, 2021, revealing a Profit-After-Tax of N32.9 billion compared to a Loss-After-Tax of N140.7 billion in 2020. The results were filed with the Nigerian Exchange Limited on Monday and also showed a 68 percent increase in the company’s turnover to N803.5 billion, up from N477.1 billion in 2020. Additionally, the group’s total borrowings increased by 10 percent to N460.8 billion, compared to N419.6 billion in 2020.

Wale Tinubu, the Group Chief Executive of Oando PLC, commented on the results, stating, “Our Audited Full Year 2021 Financial Statements are broadly in line with our earlier published Unaudited results in which we announced an increase in profitability driven by a strong revenue performance – a consequence of an 82 percent increase in average realized oil sale price – coupled with the refund of long-standing receivable.”

“Although a surge in militancy and sabotage activities across the Niger Delta negatively affected our operations during the reporting period, we have since seen progress in security initiatives and are consistently seeking innovative solutions to stabilize our oil & gas production.

“Moving forward, we remain committed to driving growth within our upstream and trading businesses, whilst simultaneously diversifying our portfolio by investing in non-fossil and climate-friendly energy solutions through Oando Clean Energy Limited. We will continue to update our esteemed shareholders as progressive developments are made in the coming year.”

During the twelve months to December 31, 2021, the Group incurred $63.5m in capital expenditures related to the development of oil and gas assets and exploration and evaluation activities, compared to $83.4m in the twelve months to December 31, 2020.

In 2021, Capital Expenditures (CapEx) were allocated as follows: $59.2 million was spent on oil and gas properties at OMLs 60 to 63, $3.3 million at OML 56, and $1.0 million was recorded as capital expenditure for other assets.

The revenue for this period received a positive boost from elevated product prices. The realized average crude oil price surged by 82 percent, reaching $62.14 per barrel compared to $34.21 per barrel in 2020. Natural gas also increased by 38 percent, reaching $9.96/boe compared to $7.20/boe in 2020, while NGL rose by 31 percent, reaching $7.16/boe compared to $5.48/boe in 2020. Additionally, an eight percent rise in traded crude oil volumes (17,445,256 bbls compared to 16,081,633 bbls in 2020) and a 39 percent surge in traded refined products (962,370 MT compared to 694,653 MT in 2020) collectively contributed to an overall revenue increase of 68 percent, reaching N803.5 billion compared to N477.1 billion in the same period in 2020.

However, revenue growth was hindered by a 40 percent decline in production, dropping to 26,775 boepd from 44,550 boepd in 2020, primarily due to heightened sabotage activities. The group’s operating profit in 2021 reached N78.8 billion, driven by increased revenue and the reversal of asset impairments totaling N104.9 billion.

In March, Oando Plc informed the NGX and the Johannesburg Stock Exchange Limited about an offer from its core shareholder, Ocean and Oil Development Partners Limited, to acquire shares from all minority shareholders in Oando and subsequently delist from the exchanges. Some shareholders expressed concerns about the deal, citing the company’s years-long absence of dividend payments and its plans for delisting. For the year ending December 31, 2021, the directors did not propose a dividend, consistent with the previous year.

Additionally, Oando announced its acquisition of the oil and gas unit of Italian oil giant Eni in September. In the statement regarding the acquisition, Oando disclosed an agreement with Eni for the purchase of 100 percent of the shares of Nigerian Agip Oil Company Limited. The transaction raised concerns in some quarters, with the Petroleum and Natural Gas Senior Staff Association of Nigeria and the Nigeria Union of Petroleum and Natural Gas Workers threatening to withdraw their services due to concerns about the welfare of their members in the organizations involved in the deal.

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Written by Olusesan Oba

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