[upme_private]Oando Plc released its 2012 Audited Results with revenues increasing 17.8% to N673.1billion (2011: N571.3billion). Gross profit also increased 24% to N81.6billion during the period as cost of sales tapered down relative to revenues during the period. Operating profit for the period was N34.1billion a 76% increase from the N19.3billion posted a year before. Pre-tax profits also rose 35.3% to N17.5billion as a N11billion reduction in operating expenses set of the extra N10billion in interest expense during the period.
Profit after tax for the period increased over five folds to N10.7billion for the period ended December 2012.
Key Highlights
- Despite an N85billion rise in cost of sale during the period, N673billion derived in revenue was high enough to offset the impact. Gross profit margin therefore increased to 12.1%
- The company slashed an astonishing N10.5billion in operating expenses during the period. The largest drop was in administrative expenses which dropped from N52billion to N42billion. Selling and marketing costs dropped N7.8billion to N7.55billion as well.
- Finance cost however rose 160% to N16.5billion as the company added an extra N82billion in loans during the period. The extra increase in loans obtained was used in funding new investments such as the acquisition of oil blocks and expansion into power projects
- The results shows a debt to equity ratio of about 2.7x
- Oando also just concluded a rights issue where it raised about N54.5billion in new equity.
- The additional equity raised will see the debt to equity ratio decline to 1.8x which is much better than the current ratios. I see the company exploring new sources of equity capital to further reduce their debts. to at least 100-80% of Equity.
- I won’t be surprised to hear the company announce moves to sell part of their equity in oil blocks and energy investments to foreign interest in the near future as part of its alternative sources of debt free capital
- The company has a healthy retained earnings of N37.1billion which I believe is just about enough to ensure dividend payments for at least one financial year.
- Oando share price has taken a hit in the last one month, dropping 16% to N13.05 (at the time I wrote this blog) from N15.15. It has returned a negative 9% in the last year also compared to most stocks that have seen over 100% return on share price appreciations.
- Oando currently trades at 2.7x in P.E and the share prices is 87% of its book value per share
Oando Plc 2012 full year audited results was posted on the website of the NSE[/upme_private]
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