2016 Half Year Results:
Oando Plc has revealed that it took a”One-off” unrealized foreign exchange losses of N28.6 billion from dollar denominated liabilities as a result of currency devaluation.
The Central Bank of Nigeria had on June 20th introduced a flexible exchange rate policy which depreciated the value of the Naira from about N199 to over N282 in one day.
The effect of this is that companies such as Oando with foreign denominated liabilities or loans would take an exchange rate loss to cover for the increase in the value of the loans being owed due to the floating of the Naira against major currencies.
Oando also released the following press release containing highlights of its 2016 Half year results;
- Turnover increased by 18%, N212.0 billion compared to N180.0billion (H1 2015)
- Gross Profit decreased by 49%, N19.0 billion compared to N37.1 billion (H1 2015)
- Loss-After-Tax decreased by 23%, (N27.0 billion) compared to (N35.0 billion) (H1 2015)
- One-off unrealized foreign exchange losses of N28.6 billion from dollar denominated liabilities as a result of currency devaluation.
- Refinancing of debt through N108 billion Medium Term Note, including the conversion of a substantial portion of the dollar denominated debt into Naira.
Operational Highlights: Upstream:
- Oando Energy Resources (OER) through its 81.5% held subsidiary, Equator Exploration Ltd, successfully farmed out 65% participating interest in blocks 5 & 12 in the Exclusive Economic Zone of the Democratic Republic of Sao Tome and Principe. Midstream:
- Oando Gas & Power achieved 55% completion of the Central Horizon Gas Company (CHGC) 8.5km pipeline expansion. 200% subscription of gas capacity in the 20 mmscf/day Mini LNG plant development in Ajaokuta, Kogi State. Downstream:
- Oando PLC concluded $210 million recapitalization and partial divestment of Oando Downstream.
- As the global economic challenges persist, Oando has been duly affected as a result of the new reality in international commodity prices of ~$50/barrel and the operating challenges in the Niger Delta that have occasioned a 25% reduction in daily production volumes from ~56kboepd H1, 2015 to 45kboepd H1, 2016.
- The devaluation of the Naira by the Central Bank of Nigeria in Q2, 2016, from an average exchange rate of N199.00:$1.00 to above N280.00:$1.00, has resulted in unrealized foreign exchange losses due to our dollar denominated liabilities. We have taken action by converting $133 million liabilities on our books to N38.6 billion which are currently being serviced by naira, hence leaving only dollar denominated liabilities to be serviced by our dollar earnings.
- In the period under review we have executed 70% of our asset disposal target and 100% of our refinancing target and are poised to return the business to profitability by year end 2016.
Get press release