Economy
Oando Declares N330b Turnover In 9 Months
By Modupe Gbdayanka
Nigeria’s leading indigenous energy group listed on both the Nigerian and Johannesburg Stock Exchange, Oando Plc, has announced its unaudited results for the six months period ended on September 30, 2016.
In the financial analysis, the company recorded a turnover increase by 26 percent, moving from N262 billion in the same period last year to N330 billion this year.
However, its Gross Profit decreased by 52 percent, N28.7 billion compared to N60 billion in the first half of 2015. Also, it Loss-After-Tax decreased by 25 percent, N35.9 billion compared to N47.6 billion in H1 2015.
Looking at its operational highlights, Oando Energy Resources (OER), during the nine months ended September 30, 2016, recorded a production of 12.0 MMboe (average 43,617 boe/day) in the upstream, while in the midstream, the company signed a definite agreement to divest 49 percent voting rights in Oando Gas & Power (OGP) to Helios Investment Partners for $115.8 million.
During the period under review, OGP Achieved 59 percent completion in Central Horizon Gas Company (CHGC) Pipeline Expansion Project, while it achieved 93 percent completion in Greater Lagos 4 Project.
Oando said in a press statement announcing its financial results that the “Nigerian economic environment continues to impact our business as we witnessed a further devaluation of the Naira during Q3, 2016, from an average exchange rate of N280.00:$1.00 in Q2 to an average of N316.00:$1.00 in Q3 2016.”
This, it explained, has resulted in further foreign exchange losses due to an impairment of our dollar denominated receivables.
“For the major part of the year, we have faced operational challenges due to the unrest in the Niger
Delta, however we find comfort in The Nigerian Government’s discussions and engagement in the region, indicating a possible resolution and as thus we expect our production levels to stabilise and gradually incline in the coming months. Despite these economic challenges, we must highlight our achievements in the 3rd quarter as witnessed by the improvement in our top line revenue as a result of our new business model of a diversified business with higher weighted dollar earnings in both the Upstream and International Trading businesses,” Oando said.
It said the above drove revenues up by 96 percent and led to significant foreign exchange gains between the second and third quarters.
Commenting on the results, Mr Wale Tinubu, Group Chief Executive, Oando PLC said: “The third quarter witnessed the FGN establish a seize fire with the militants responsible for production disruptions in the Niger Delta, leading to stabilised daily productions from our assets and expectations of imminent increases to our 2015 production highs of 56kbbls/day.
“We have also been proactive in our cost management initiative to ensure maximised value extraction for every barrel of oil produced as the global oil price still lingers below $50/bbl. We are pleased to have executed a SPA with Helios Investment partners for ~$116 million, representing 49 percent legal voting rights in the company’s midstream business, of which the proceeds of the divestment will be utilised towards the company’s debt restructuring initiative.
“The trading business has grown significantly this quarter having exported over 14 cargoes of crude with volumes exceeding 14mmbbls and an additional 8 cargoes of other oil based products. Our business model of dollar denominated earnings is taking shape as evidenced from the increased revenue line and future increases from the Upstream business through production and export trading businesses through increased lifting’s, whilst focusing on reduced costs to ensure profitability through these streams.”
Operational Update
Oando PLC successfully concluded the recapitalization and partial divestment of Oando Downstream for $210 million.
Oando Energy Resources (OER) had an average production of 41,094 boe/day compared to 53,169 boe/day in the third quarter of 2015, this reduction was mainly due to the disruptions in the Niger Delta. Notwithstanding, the corporation continues to shrink its debt burden as witnessed by a reduction in debt from $900 million post acquisition in 2014 to $407 million today, signifying a total pay down of over 50% in 2 years.
Our trading business, Oando Trading Dubai (OTD) posted revenues of N64.9bn in Q3 from lifting volumes exceeding 14mmbbls from 14 cargoes of crude and an additional 8 cargoes of other petroleum products.
In September 2016, Oando PLC signed a definitive agreement with Helios Investment Partners to divest 70% economic rights in Oando Gas and Power. The agreed transaction consideration of US$ 115.8 million is conditional upon the receipt of regulatory approvals and subject to customary purchase price adjustments. Upon completion, 49% of the voting rights in OGP would be retained by Oando, while Helios Investment Partners will hold 49% and the residual 2% will be held by a local entity.
Oando Gas & Power (OGP) as at H1 2016, achieved 59% completion of the Central Horizon Gas Company 8.5 km pipeline expansion project, the pipeline, which is set to be completed in the fourth quarter of 2016, and will increase the throughput capacity by 400%, thereby providing increased supply of gas in the South-East region of Nigeria.
During the 3rd Quarter 2016, Oando Gas and Power connected 7 new customers to the pipeline network of GNL. These customers are expected to increase GNL’s gas volume sales in 2016. The business also connected 3 new major customers in GNSL, with significant increase in monthly volume sales performance.
By Adedapo Adesanya
NASD Over-the-Counter (OTC) Securities Exchange remained in the negative territory after it further depreciated by 0.64 per cent on Friday, July 24, despite recording four price gainers.
The NASD Security Index (NSI) dropped 27.4 points at the close of business to settle at 4,294.75 points versus the previous day’s 4,383.48 points, while the market capitalisation gave up N16.49 billion to end at N2.577 trillion, in contrast to the N2.594 trillion it ended a day earlier.
The bourse was down during the session amid heavy sell-offs, with the volume of transactions skyrocketing by 693.9 per cent to 2.99 million units from Thursday’s 377,635 units.
Equally, the value of trades went up by 71.6 per cent to N69.4 million from N40.4 million, and the number of deals increased by 41.0 per cent to 55 deals from the preceding day’s 39 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 75.6 million units traded for N5.4 billion.
GNI Plc was also the most active stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
The market ended the session with four price gainers and two price losers, led by FrieslandCampina Wamco Nigeria Plc, which lost N7.44 to trade at N136.19 per share compared with the previous day’s N143.63 per share, and CSCS Plc, which declined by N1.64 to N93.63 per unit from N95.27 per unit.
But MRS Oil gained N13.50 to sell at N148.50 per share versus N135.00 per share, Afriland Properties Plc advanced by 56 Kobo to N17.41 per unit from N16.85 per unit, UBN Property Plc surged by 18 Kobo to N1.93 per share from N1.75 per share, and Food Concepts Plc climbed by 1 Kobo to N2.50 per unit from N2.49 per unit.
By Dipo Olowookere
Nigeria’s stock exchange succumbed to profit-taking on Friday, losing 0.19 per cent when the closing gong was hit at 4 pm.
Shares in the banking and energy sectors influenced the decline suffered by the Nigerian Exchange (NGX) Limited during the session, as they respectively closed lower by 0.40 per cent and 0.04 per cent.
The industrial goods index was flat yesterday, while the insurance counter gained 0.68 per cent and the consumer goods space chalked up 0.25 per cent. The gains by these two segments could not keep Customs Street in the green territory at the close of business.
As a result, the All-Share Index (ASI) retreated by 474.00 points to 247,357.40 points from 247,831.40 points, and the market capitalisation decreased by N306 billion to N159.588 trillion from N159.894 trillion.
Presco dropped 10.00 per cent during the trading day to close at N2,070.00, Thomas Wyatt crumbled by 9.93 per cent to N3.63, Trans-Nationwide Express plunged by 8.44 per cent to N2.82, Royal Exchange slipped by 7.86 per cent to N1.29, and LivingTrust Mortgage Bank shrank by 7.32 per cent to N3.80.
On the flip side, C&I Leasing improved by 9.48 per cent to N6.35, Cornerstone Insurance rose by 9.09 per cent to N6.00, RT Briscoe jumped by 8.61 per cent to N13.25, Honeywell Flour expanded by 7.38 per cent to N17.45, and Africa Prudential increased by 6.98 per cent to N13.80.
Despite the poor performance, the local bourse recorded a positive market breadth index after finishing with 35 price gainers and 25 price losers, representing strong investor sentiment.
It was a relatively quiet market on Friday, as the activity level dropped, with the trading volume down by 27.72 per cent to 565.5 million units from 782.4 million units, and the trading value contracted by 46.89 per cent to N29.9 billion from N56.3 billion, while the number of deals executed by investors soared by 16.03 per cent to 53,688 deals from 46,273 deals.
Access Holdings was the busiest stock for the session, with a turnover of 128.0 million units sold for N3.8 billion, First Holdco transacted 35.4 million units worth N4.3 billion, Chams exchanged 34.8 million units valued at N154.3 million, Zenith Bank traded 30.4 million units for N3.9 billion, and UBA sold 30.4 million units worth N1.5 billion.
By Adedapo Adesanya
The Naira marked a whole week of appreciation against the United States Dollar on Friday, July 24, further gaining N5.67 or 0.41 per cent to close at N1,362.09/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) compared with N1,367.76/$1 it ended on Thursday.
Equally, the local currency appreciated against the Pound Sterling in the official FX market yesterday by N10.83 to trade at N1,813.62/£1 versus the preceding day’s N1,824.45/£1, and improved against the Euro by N7.68 to settle at N1,549.10/€1, in contrast to the N1,556.78/€1 it was exchanged a day earlier.
However, at the parallel market and GTBank forex counter, the Nigerian currency remained unchanged against the greenback during the session at N1,400/$1 and N1,379/$1, respectively.
The Central Bank of Nigeria (CBN) buffer has been strengthened with sustained foreign portfolio inflows and robust foreign reserves, which stand above $52 billion.
The apex bank’s policy signals that the Naira will be stronger in the near term, with Nigeria clearing hurdles with FX reforms and settlement of all backlogs.
However, some traders expect that pressure may come due to foreign-currency buying from fuel importers as they make Dollar purchases to build inventories.
Meanwhile, Bitcoin (BTC), in the digital currency landscape, trimmed recent gains as it fell by 2.3 per cent to $63,787.73.
The weak action in the AI momentum trade is feeding through to crypto as well.
Further, Cardano (ADA) dropped 3.7 per cent to close at $0.1615, Solana (SOL) dipped by 2.8 per cent to $73.71, Ripple (XRP) crashed by 2.3 per cent to $1.08, Ethereum (ETH) slid by 1.9 per cent to $1,851.58, Dogecoin (DOGE) retreated by 0.8 per cent to $0.0694, Binance Coin (BNB) contracted by 0.7 per cent to $564.18, and TRON (TRX) lost 0.5 per cent to trade at $0.3292, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
