Nigerian energy company Oando Plc has overcome macro conditions bedeviling most companies in Africa’s largest economy as the oil and gas giant top lines were impressive.
Oando recorded a turnover of N424.67 billion to end 2014 financial year. Gross profit increased by 17 percent to N69.18 billion in December 2014 compared with N59.28 billion the previous year. Other operating income was up by 1240 percent to N68.78 billion.
This means the growth strategy of the company has paid off.
Oando bought ConocoPhillips’s upstream oil and gas business in Nigeria last July for $1.5 billion, helping it transition from a marketer of refined petroleum products into one of the top players in the West African country’s oil industry.
Analysts say the stellar performance of the company is commendable given volatility in the oil and gas industry.
The economy of Africa most populous has been reeling as a result of the halving of oil prices.
The central bank has devalued the currency twice and foreign reserves have been depleted due to the aforementioned drop in oil price.
Oando said on its web site that the delay of payments of subsidies from the Federal Government has added to volatility and culminated in the realization of N7.3 billion in foreign exchange losses.
Nigeria’s consumer inflation was at 9.4 percent year-on-year in September, up 0.1 percent from August, and staying above the central bank’s target upper limit, the national bureau of statistics (NBS), said.
Oando allayed the fears of shareholders and investors by hedging itselt from currency risk caused by devaluation as it prepaid $238 million out of the $900 million it borrowed to finance the acquisition of ConocoPhillips.
Hedge means making an investment to reduce the risk of adverse price movements in an asset.
Oando is making giant stride at its upstream business as production increased by 90.19 percent to 51,000 boepd by the end of 2014, based on information on the company’s website.
The company also made an increase in its 2P reserves in the period under review.
The company said on its web site that it booked an additional N16.9 billion write down on under-lift receivables and Production Sharing Contract receivables in its exploration and production business.
The energy services business realized impairments of N37.1 billion.
Oando’s total assets increased by 51.95 percent to N889.37 billion in December 2014 from N585.37 billion recorded last year.
The company’s share price closed at N9.96 on the floor of the exchange on Friday while market capitalization was N119.86 billion.
OUR REPORTER
