Oando Plc Audited results for the full year ended 31 December 2011

Oando Plc Audited results for the full year ended 31 December 2011

Highlights
– Turnover of US$3.8 billion
– Gross profit of US$446.3 million
– Operating profit of US$138.5 million
– Profit after tax of US$15.9 million
– Attributable profit after tax of US$17.3 million
– Earnings per share of 0.76 cents
Review of results
Oando, which has a primary listing on the Nigerian Stock Exchange (“NSE”) and a secondary listing on the JSE Limited (“JSE”), reports profit after tax (“PAT”)for the full year ended 31 December 2011 of US$15.9 million.
Statement of comprehensive income analysis. The Group’s revenue increased by 49% while PAT reduced by 79% when compared to the same period of 2010. Also, profit before tax (PBT) reduced by 37% compared to the figures for the 2010 period. The performance compared to 2011 is attributable to the following:
Turnover (49% increase)
Turnover increased due to the following:
– Increase in volume of refined petroleum products (PMS and AGO) sold during the year compared to 2010;
– Higher average crude oil prices in 2011 compared to 2010;
– 12.15MW Akute Power Plant operated for twelve months in 2011 compared to nine months during the same period of 2010;
– New customers were connected to Gaslink pipeline network; and
– One of our rigs, Teamwork, operated throughout the year in 2011 compared to seven months in 2010.
Other operating income (186% increase)
Other operating income increased due to the following:
– Increased exchange gain was earned during the year due to exchange rate fluctuations compared 2010; and
– Increased project management income was recorded by the Gas and Power Division compared to 2010.
Administrative expenses (109% increase) Administrative expenses increased due to the following:
– Lower costs were recovered in OML 125 compared to prior year;
– Additional operating costs (including depreciation) incurred on new businesses (rig and independent power plant);
– Higher volume petroleum products were sold at upcountry locations thereby incurring more selling expenses compared to the same period in 2010; and
– Fund raising activities’ costs e.g. GDR and inconclusive bidding for upstream assets acquisition were written off in 2011. Similar charges did not occur in 2010.
Selling and marketing expenses (7% increase)
Selling and marketing expenses increased due to the following:
– Higher volumes of petroleum; and
– Products transported and sold at the upcountry locations during 2011, compared to the 2010 period.
Finance cost (7% increase)
Finance costs increased due to the following:
– General increase in borrowing costs from an average of about 14% to 18%; and
– Additional finance costs on newly operational assets. (For instance, interests costs were charged to the income statements for twelve months in 2011 on the second rig and Akute Power Plant whereas it was capitalized for some months in 2010 before commencing operation).
Statement of financial position analysis
Property, plant and equipment (7% increase)
Property, plant and equipment increased due to the following:
– Capital expenditure incurred on the power plants, rigs refurbishment and upstream assets development.
Non-current receivables(30% increase)
Non-current receivables (cost of gas distribution pipeline assets) increased due to the following:
– to additional capital expenditure on the East Horizon’s Gas pipeline
project and new customers being connected to the Greater Lagos distribution network.
Inventory(38% increase)
Inventory for the period increased when compared to 2010 due to the following:
– More petroleum products received towards the end of 2011 compared to the same period of 2010; and
– Higher average crude oil prices.
Trade and other receivables (29% increase)
The 21% decrease in trade and other receivables is attributable to:
– Additional receivables from new businesses (power plant, OES Teamwork which was in operation for a longer period in 2011 when compared to the corresponding period in 2010; and
– Increase in trading activities in 2011 compared to 2010.
Borrowings
Current and non-current borrowings increased by 8% and 64% due to the following:
– Depreciation of the Naira in 2011 relative to the same period of 2010 resulted in increase in foreign-currency denominated short term borrowings;
– Additional borrowings were secured to finance the capital expenditure (rig upgrade, gas pipeline construction and development of upstream assets);and
– Additional funding requirements for import finance due to increase costs and volume of petroleum products.
The Group has made reasonable progress in the development of OML 90. We shall continue our collaboration with relevant partners to develop upstream assets owned by Equator Exploration Limited, a subsidiary acquired during 2009.
Further growth in upstream portfolio is envisaged through the strategic acquisition of producing or near term assets. These efforts are intended to improve contribution by the upstream business to the Group’s revenue.
Additional customers were connected to the Greater Lagos distribution network in order to utilise the additional capacity provided by the completed Greater Lagos Phase 3 pipeline network.
The Eastern Horizon Gas Company’s 128 kilometre pipeline project was commissioned during the year. This will result in higher revenue and profitability of the gas and power division. The Federal Government policy on deregulation of the downstream sector of the petroleum industry is expected to kick off in 2012.
The Supply & trading business has strategically positioned itself to take advantage of this window and consolidate its foray into the West African markets. In addition, the Marketing business has positioned itself to take full advantage of the inherent gains from the deregulation of the downstream sector immediately after commencement of this policy.
The Energy services business almost completed refurbishment of the third rig. The rig is expected to become operational during 2012.
The Group is confident that the diversified asset portfolio
Source: www.oandoplc.com
ISSUERS OF NEWS RELEASES AND NOT OILANDGASPRESS.COM ARE SOLELY RESPONSIBLE FOR THE ACCURACY OF THE CONTENT.
Public relations, press release distribution service, investor relations, SEC filing, regulatory news,upstream, downstream,corporate announcements,technology developments and political news
www.oilandgaspress.com – The ‘one stop shop’ for global Oil and gas press releases!!!
>Oil and Gas Press
ISSUERS OF NEWS RELEASES AND NOT OILANDGASPRESS.COM ARE SOLELY RESPONSIBLE FOR THE ACCURACY OF THE CONTENT.
Public relations, press release distribution service, investor relations, SEC filing, regulatory news,upstream, downstream,corporate announcements,technology developments and political news
www.oilandgaspress.com – The ‘one stop shop’ for global Oil and gas press releases!!!

#FOLLOW US ON INSTAGRAM