Economy
Oando Plans Raising Production to Sustain Profitability for Dividend Payment
By Dipo Olowookere
Group Chief Executive Officer of Oando Plc, Mr Wale Tinubu, has disclosed that the indigenous energy group listed on both the Nigerian and Johannesburg Stock Exchange, will now focus on increasing oil production so as to sustain profitability.
Speaking today on the performance of the company in the first quarter of 2019, the lawyer turned boardroom expert said, “With ICE Brent Crude Oil price currently at a decent level of $74.48 per barrel, our efforts will be geared towards increasing our production to sustain profitability and position us on the path to resumption of dividend payment to our shareholders.”
During the three months ended March 31, 2019, production increased by 11% at 43,745boe/day, compared with 39,556boe/day in the same period of 2018. Oil production in particular increased by 13% from 14,823bbls/day in Q1 2018 to 16,815bbls/day in Q1 2019, whilst natural gas production increased by 18% from 124,910mcf/day in Q1 2018 to 147,163mcf/day in Q1 2019.
Capital expenditure of $19.3 million (N7.0 billion) was incurred in the three months of 2019 compared to $6.6 million (N2.4 billion) in same period in 2018. This consists of $18.5 million (N6.7 billion) at OMLs 60 to 63, $0.5 million (N180.8 million) at OML 56, and $0.3 million (N108.5 million) on other assets.
In Q1 2019, Oando Trading traded approximately 3.8 million barrels of crude oil under various contracts with the Nigerian National Petroleum Corporation (NNPC) and delivered 103,720 MT of refined products. Our trading business continues to solidify its relationships with leading international and local banks, maintaining sizeable and well diversified structured Trade Finance facilities required to support future growth.
Commenting further on the performance of the company, Mr Tinubu said, “Our results reflect the progress made over the last few quarters and provides an indication of our expectation for the year.”
He said, “Now that our debt profile is down by 78% from $2.5 billion as of December 2014 to $558 million currently, and our de-leverage program is 90% complete with most of our non-core operations divested for good value, we can now focus on steady growth in our upstream entity.”
In the period under review, the company’s revenue was N168.0 billion, an increase of 12% compared to the same period in 2018 (N150.6 billion) primarily driven by an 11% increase in production, and an 11% growth in traded volumes compared to prior year.
In addition, operating Profit for the period was N17.1 billion, an increase of 15% compared to the same period in 2018 (N14.9 billion). This was primarily driven by higher revenue as well as the profit realized on the disposal of our residual interest in Axxela Limited.
Profit-After-Tax for the period was N4.6 billion, an increase of 11% compared to the same period in 2018 (N4.2 billion). This was primarily driven by a 15% increase in Operating Profit.
Total Group Borrowings for the period stood at N200.9 billion, a 5% decrease from FYE 2018 (N210.9 billion) whilst in our upstream specifically, our borrowings reduced by 8% to $234.3 million compared to $255.6 million in FYE 2018. Since FYE 2014, the Group has reduced its debt by 58% from N473.3 billion while our upstream borrowings have reduced by approximately 71% from $801.6 million in 2014 to $234.3 million (Q1 2019).
Oando said looking ahead, it expects prices to remain at their current levels in the near term. Oil prices have recovered to over $74 per barrel as at the end of April 2019 after reaching a low of just over $50 per barrel at the end of 2018.
“As a business, our focus will be largely on driving profitability via growth in our upstream business and achieving further reduction of borrowings.
“In the upstream, we will pursue production growth initiatives through strategic alliances, whilst ensuring operational efficiency and fiscal prudence. We will also continue to work with our partners to achieve cost optimization on our Joint Venture operations, ensuring the gains from higher revenues are not lost to increasing operating costs.
“Our trading business’s primary focus will be geared towards growing our existing market share in Nigeria while leveraging on our relationships with international financiers,” the firm said.
By Modupe Gbadeyanka
The federal government, the 36 states of the federation and the 774 local government areas have received N1.727 trillion from the Federal Accounts Allocation Committee (FAAC) for December 2024.
The funds were disbursed to the three tiers of government from the revenue generated by the nation in November 2024.
At the December meeting of FAAC held in Abuja, it was stated that the amount distributed comprised distributable statutory revenue of N455.354 billion, distributable Value Added Tax (VAT) revenue of N585.700 billion, Electronic Money Transfer Levy (EMTL) revenue of N15.046 billion and Exchange Difference revenue of N671.392 billion.
According to a statement signed on Friday by the Director of Press and Public Relations for FAAC, Mr Bawa Mokwa, the money generated last month was about N3.143 trillion, with N103.307 billion used for cost of collection and N1.312 trillion for transfers, interventions and refunds.
It was disclosed that gross statutory revenue of N1.827 trillion was received compared with the N1.336 trillion recorded a month earlier.
The statement said gross revenue of N628.972 billion was available from VAT versus N668.291 billion in the preceding month.
The organisation stated that last month, oil and gas royalty and CET levies recorded significant increases, while excise duty, VAT, import duty, Petroleum Profit Tax (PPT), Companies Income Tax (CIT) and EMTL decreased considerably.
As for the sharing, FAAC disclosed that from the N1.727 trillion, the central government got N581.856 billion, the states received N549.792 billion, the councils took N402.553 billion, while the benefiting states got N193.291 billion as 13 per cent derivation revenue.
From the N585.700 billion VAT earnings, the national government got N87.855 billion, the states received N292.850 billion and the local councils were given N204.995 billion.
Also, from the N455.354 billion distributable statutory revenue, the federal government was given N175.690 billion, the states got N89.113 billion, the local governments had N68.702 billion, and the benefiting states received N121.849 billion as 13 per cent derivation revenue.
In addition, from the N15.046 billion EMTL revenue, FAAC shared N2.257 billion to the federal government, disbursed N7.523 billion to the states and transferred N5.266 billion to the local councils.
Further, from the N671.392 billion Exchange Difference earnings, it gave central government N316.054 billion, the states N160.306 billion, the local government areas N123.590 billion, and the oil-producing states N71.442 billion as 13 per cent derivation revenue.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.65 per cent gain on Friday, December 13, boosted by three equities admitted on the trading platform.
On the last trading session of the week, Okitipupa Plc appreciated by N2.70 to settle at N29.74 per share versus Thursday’s closing price of N27.04 per share, FrieslandCampina Wamco Nigeria Plc added N2.49 to end the session at N42.85 per unit compared with the previous day’s N40.36 per unit, and Afriland Properties Plc gained 50 Kobo to close at N16.30 per share, in contrast to the preceding session’s N15.80 per share.
Consequently, the market capitalisation added N6.89 billion to settle at N1.062 trillion compared with the preceding day’s N1.055 trillion and the NASD Unlisted Security Index (NSI) gained 19.66 points to wrap the session at 3,032.16 points compared with 3,012.50 points recorded in the previous session.
Yesterday, the volume of securities traded by investors increased by 171.6 per cent to 1.2 million units from the 447,905 units recorded a day earlier, but the value of shares traded by the market participants declined by 19.3 per cent to N2.4 million from the N3.02 million achieved a day earlier, and the number of deals went down by 14.3 per cent to 18 deals from 21 deals.
At the close of business, Geo-Fluids Plc was the most active stock by volume on a year-to-date basis with a turnover of 1.7 billion units worth N3.9 billion, followed by Okitipupa Plc with the sale of 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for N5.3 million.
In the same vein, Aradel Holdings Plc remained the most active stock by value on a year-to-date basis with the sale of 108.7 million units for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with a turnover of 297.3 million units worth N5.3 billion.
By Adedapo Adesanya
The Naira appreciated further against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N1.50 or 0.09 per cent to close at N1,533.00/$1 on Friday, December 13 versus the N1,534.50/$1 it was transacted on Thursday.
The local currency has continued to benefit from the Electronic Foreign Exchange Matching System (EFEMS) introduced by the Central Bank of Nigeria (CBN) this month.
The implementation of the forex system comes with diverse implications for all segments of the financial markets that deal with FX, including the rebound in the value of the Naira across markets.
The system instantly reflects data on all FX transactions conducted in the interbank market and approved by the CBN.
Market analysts say the publication of real-time prices and buy-sell orders data from this system has lent support to the Naira in the official market and tackled speculation.
In the official market yesterday, the domestic currency improved its value against the Pound Sterling by N12.58 to wrap the session at N1,942.19/£1 compared with the previous day’s N1,954.77/£1 and against the Euro, it gained N2.44 to close at N1,612.85/€1 versus Thursday’s closing price of N1,610.41/€1.
At the black market, the Nigerian Naira appreciated against the greenback on Friday by N30 to sell for N1,650/$1 compared with the preceding session’s value of N1,680/$1.
Meanwhile, the cryptocurrency market was largely positive as investors banked on recent signals, including fresh support from US President-elect, Mr Donald Trump, as well as interest rate cuts by the European Central Bank (ECB).
Ripple (XRP) added 7.3 per cent to sell at $2.49, Binance Coin (BNB) rose by 3.5 per cent to $728.28, Cardano (ADA) expanded by 2.4 per cent to trade at $1.11, Litecoin (LTC) increased by 2.3 per cent to $122.56, Bitcoin (BTC) gained 1.9 per cent to settle at $101,766.17, Dogecoin (DOGE) jumped by 1.2 per cent to $0.4064, Solana (SOL) soared by 0.7 per cent to $226.15 and Ethereum (ETH) advanced by 0.6 per cent to $3,925.35, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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