Oando Sustains Positive Moment with N4b Profit in Q1 2018
By Modupe Gbadeyanka
The positive momentum recorded by Oando Plc in its 2017 financial year was maintained in the Q1 2018 earnings, Business Post has observed in the financial statements of the energy firm for the period ended March 31, 2018.
In the period under review, the company declared a profit after tax of N4.1 billion with turnover increasing by 9 percent to N150.5 billion from N138.4 billion in the corresponding period of last year.
Also, the gross profit appreciated by 108 percent to N27.9 billion from N13.4 billion achieved in Q1 2017.
According to the group CEO of Oando Plc, this positive performance was influenced by a stable operating environment and continued incline in crude oil price.
“I am pleased to announce that the Company has maintained the momentum of 2017 by posting a profit of N4.1 billion in our first quarter ended March 31, 2018 unaudited financials.
“Our Q1 performance was characterised by a stable operating environment, continued incline in crude oil prices, and the highest level of compliance by member countries’ of the OPEC Accord.
“Considering the background of current industry trends, the Company is committed to maximizing throughput rates to ensure a positive financial performance in the ensuing quarters of 2018,” Mr Tinubu stated.
A look at Oando’s upstream operations showed that Oando Energy Resources (OER) recorded a 4 percent increase in total production to 3.6MMboe (average 39,556 boe/day) from 3.4MMboe (average 38,125 boe/day) in comparative period of Q1 2017.
Also, OER realised a net profit of N8.6 billion ($23.8 million) compared with N5.8 billion ($16.2 million) profit in the comparative period of Q1 2017, while it recorded an average production of 39,556 boe/day in the 3 months ended March 31, 2018 compared with 38,125 boe/day in the comparative period of 2017.
It was observed that the improved production was primarily due to increased production at Ebendo as a result of the Trans Forcados pipeline, which was down in the same period in 2017 as well as increased production at OMLs 60 to 63 as a result of reduced sabotage and crude theft activities, which necessitated a shut-in on production lines in the comparative period of 2017.
At the end, OER recorded a net profit of N8.6 billion ($23.8 million) compared with N5.8 billion ($16.2 million) in the comparative period of Q1 2017. The increase in net income between the quarters was primarily due to higher revenues as a result of a general increase in the price of oil and gas commodities (Q1 2018: Oil -$65.49/bbl, Gas – $1.54/mcf, NGL – $13.59/boe, compared to Q1 2017: Oil – $51.74/bbl, Gas – $1.39/mcf, NGL-$9.62/boe).
Its midstream subsidiary, Axxela, achieved drawdown on a N1.5 billion facility to refinance the Central Horizon Expansion Pipeline’s term loan.
For the downstream operations handled by OTD, the firm recorded average trading volumes of 32,000 bpd in the three months ended March 31, 2018 compared to 70,000 bpd in the comparative period of 2017
A total of 2.9m barrels of Crude Oil and 163,000 MT of petroleum products were traded in the first quarter of the year just as trading revenues remained relatively stable slightly over N108.1 billion ($300 million), driven by a strong performance in West African flows.
The first quarter of 2018 saw global crude prices average $66 per barrel, $3 more than the projected average of $63 for 2018 and 2019. The extension of the OPEC oil production cut agreement through 2018 further buoyed crude oil prices and are reflective in the balance sheet of various economies.
In Nigeria, macroeconomic indicators recorded progress in the first quarter of the year, as oil production increased, inflation rate moderated, the exchange rate and operating environment remained stable.
The outlook for 2018 remains promising as Nigeria’s Gross Domestic Product (GDP) is set to grow by 2%, propelled by increased oil production, improved government spending and investments set to benefit from an increasingly attractive investment climate.