Leading energy company, Oando Plc reported its unaudited 2023 full-year results showing a 78.9% growth in revenues to N3.5 trillion.
This substantial revenue increase was driven by higher sales volumes, while the bottom line benefited significantly from foreign exchange gains related to crude oil earnings.
The company posted a profit after tax of N74.7 billion, a stark contrast to the loss of N81.2 billion recorded in the previous year.
This improvement in earnings is anticipated to significantly bolster Oando’s plans to acquire 100% of the shares of Nigerian Agip Oil Company Limited (NAOC Ltd).
The company already secured $800 million in funding for the transaction.
The release of the company’s unaudited FYE2023 results is a crucial step toward meeting regulatory requirements for all listed companies.
This progress suggests that by the end of this year, the company will align with its peers in timely reporting, thereby bolstering confidence among shareholders and investors regarding its current status and prospects.
Key highlights – 2023 vs 2022
- Revenue: N3.4 trillion vs N1.9 trillion, +78.9% YoY
- Cost of sales: N3.3 trillion vs N1.9 trillion, +74.3% YoY
- Gross profit: N77.0 billion vs N78.6 billion, -2.0% YoY
- Other operating income: N381.8 billion vs N28.5 billion, +1238.6% YoY
- Administrative expenses: N240.2 billion vs N82.2 billion, +192.2% YoY
- Operating income: N214.5 billion vs N20.6 billion, +941.2% YoY
- Net finance cost: N110.4 billion vs N81.6 billion, +35.2% YoY
- Profit/(loss) before income tax: N104.1 billion vs (N61.8 billion), +268.4% YoY
- Income tax expense: N29.4 billion vs N19.4 billion, +51.4% YoY
- Profit/(loss) for the period: N74.7 billion vs (N81.2 billion), +191.9% YoY
- Basic and diluted (loss)/profit per share from (loss)/profit for the period: N6 vs (N6), +200% YoY
- Total Assets: N3.14 trillion vs N1.25 trillion
- Total Equity (loss): N236.3 billion vs N197.2 billion
- Retained Earnings (loss): N488 billion vs N568 billion
Commentary
This profit represents a positive shift in the company’s fortunes compared to the previous year when it reported a loss after tax.
- In its trading operations, Oando reported significant improvement, recording a 50% increase in traded crude oil volumes, reaching 32.8 million barrels in FYE 2023 compared to 21.8 million barrels in FYE 2022.
- However, the company experienced a 15% decrease in traded refined petroleum products, with volumes falling to 1,645,535 MT from 1,937,833 MT in FYE 2022.
- Within the broader industry context, Oando’s N74.7 billion PAT compares favorably with indigenous peers for the same period, such as Seplat Energy, which recorded N81.33 billion.
- Similarly, Total Energies Nigeria posted a PAT of N12.91 billion, while Aradel’s PAT stood at N54.2 billion.
Despite ongoing challenges and economic headwinds, energy companies like Oando and Seplat achieved commendable results.
In 2023, despite the oil and gas sector being affected by spikes in militancy and sabotage incidents, Oando managed to increase its turnover by 71% to N3.4 trillion from N1.9 trillion in FYE 2022.
Over the past four years, the company has consistently recorded an upward trend in turnover, announcing N477.1 billion in 2020, N803.5 billion in 2021, N2 trillion in 2022, and most recently, N3.4 trillion in 2023.
What they are saying
Commenting on the results, Wale Tinubu, Group Chief Executive of Oando PLC, stated:
“Despite persistent pipeline vandalism across the Niger Delta, which continues to hinder crude production, we achieved a profit after tax of N74.7 billion in 2023. This success was largely driven by increased trading volumes due to our strategic global partnerships and net foreign exchange gains on the group’s foreign currency-denominated assets, in contrast to previous losses on our foreign currency-denominated liabilities.”
Mr. Tinubu also stated that the milestone signing of the Sale and Purchase Agreement with Eni for the acquisition of 100% of the shares of NAOC Ltd marked a pivotal moment for the company highlighting that it is expected to “unlock substantial synergies” in the near future.
“Our current focus is on completing the acquisition and seamlessly integrating operations to deliver exceptional value to our shareholders,” he stated.
Speaking on the company’s strategic focus for the future, Tinubu said,
“Having weathered the storm of recent years, our latest results provide a foundation for us to consolidate and build for the future. With our planned acquisition of NAOC, we are positioned to take full operatorship and drive up outputs, value, and efficiencies. Moreover, our foray into and leadership in clean energy expand our footprint as a fully integrated energy company, with our feet firmly planted in today’s realities and the possibilities of the future.”
Oando Plc’s share price was up 8% on Friday to close at N11.8 per share.