Oando rebounds with N60.3bn profit in 2023

Oando Plc on Monday reported a profit after tax of N60.3 billion in its audited financials for the full year ended 2023, transitioning from a loss of 81.23 billion in 2022.

Mr Wale Tinubu, Group Chief Executive, Oando, in a statement on Monday in Lagos, said the company also recorded 43 per cent increase in revenue, reaching N2.9 trillion, compared to N1.9 trillion in 2022.

Tinubu said Oando achieved 961 per cent increase in its operating profits despite 24 per cent reduction in the realised oil price of 83.15 dollars/bbl in 2023, compared to 109.55 dollars /bbl in 2022.

He added that this reduction was consistent in gas prices, as the value fell from 14.74 dollars/bbl in 2022 to 12.19 dollars/bbl in 2023.

According to him, the NGL prices of the energy company also declined from 6.23 dollars/boe in 2022 to 4.87 dollars/boe in 2023.

Tinubu stated the company reduced its upstream borrowings by 23 per cent, from 635.6 million dollars in 2022 to 488.9 million dollars in 2023.

“Despite the operational hurdles occasioned by security breaches and persistent pipeline vandalism in the Niger Delta, we achieved a profit after tax of N60 billion.

“This was bolstered by the strength of our global trading alliances, increase of 12 per cent in total production, and favourable exchange gains from our foreign currency denominated assets.”

“Our recently completed transformational acquisition of NAOC Ltd., is a pivotal moment for the company due to the expansive reserves and vast infrastructure network.

“Following our 2014 acquisition of ConocoPhillips’s Nigerian unit, this transaction was the next phase in our long-term strategy to increase our reserves and production capacity.

“By leveraging the exit of the International Oil Companies, whilst securing operational control of the assets,” he said.

According to him, the energy firm’s immediate focus has shifted to a seamless integration and execution of initiatives towards achieving a marked increase in production.

The GCEO expressed confidence about the opportunities this platform provides and its commitment to delivering sustainable value to all stakeholders.

Tinubu noted that despite persistent operational security challenges in the Niger Delta, Oando achieved 12 per cent increase in total production, reaching 23,258 boepd in 2023 compared to 20,703 boepd in 2022.

Expanding on the performance of its production portfolio, he said Oando averaged a daily production of 6,211 bbls/day, making 26 per cent increase to its 4,939 bbls/day in 2022.

He said, consistent with the improved performance, the energy company averaged 16,808 boe/day of natural gas, 10 per cent better than 15,292 boe/day of natural gas in 2022.

Tinubu cited improved operations and repairs of shut-in wells offset by persistent sabotage activities as a reason for the production increase.

He said the energy firm’s operating profits increase was driven by the increase in revenue and a significant increase in other operating income, largely due to foreign exchange gains on the group’s US dollar-denominated monetary assets.

He attributed the increase in administrative expenses to primarily from exchange losses from the impact of the Naira devaluation on the nation’s foreign currency-denominated liabilities.

He said:”With this solid financial performance, Oando is well-positioned to capitalise on the opportunities presented by the energy sector.

“Building on the momentum generated by its 783 million dollars acquisition of Nigerian Agip Oil Company (NAOC) in August 2024.

“The acquisition doubled the company’s total reserves to 1.0 billion barrels of oil equivalent (boe) from 505.6 million boe based on 2022 reserves estimates.

“With its new status as an operator, Oando is better positioned to control its destiny by deploying its acquired assets to deliver even better returns to its shareholders.

According to him, with the release of its 2023 audited financial statements, the company is bringing its reporting obligations to date, expecting that its recent shares trading suspension will be lifted, allowing investors to benefit.

Tinubu said that this was in tandem with its record share performance on the Nigerian Stock Exchange (NGX) and its share price on an upward trajectory, specifically growing by 399 per cent, following its acquisition of NAOC.