Oando Plc has released its FY 2022 financial statements, posting a loss after tax of N81.2 billon during the year compared to a profit after tax of N32.9 billion reported in FY2021.
The company blamed lower profits on heightened militancy and pipeline vandalism acts within the Niger Delta region which contributed to lower production output.
The release represents the first time since 2022 that Oando has made public its financial statements, as it managed legal and regulatory hurdles across two markets where the company is listed.
It’s 2023 FY results is also being expected as regulatory compliance efforts continues.
Key Highlights FY 2022 vs FY 2021
- Revenue: N1.99 trillion, +147.7% YoY
- Cost of sales: N1.92 trillion, +151.4% YoY
- Gross profit: N78.6 billion, +83.4% YoY
- Operating profit: N20.6 billion, -73.9% YoY
- Net finance costs: N81.6 billion, +136.5% YoY
- Profit/(loss) before tax: (N61.8 billion), -239.0% YoY
- Profit/(loss) for the year: (N81.2 billion), -347.2% YoY
- Total assets: N1.25 trillion, +25.7% YoY
- Total equity: -N197.2 billion, -34.6% YoY
- Retained losses: -N568 billion, -15.4% YoY
Management Notes
According to the Company’s statement, in its downstream business, Oando sold approximately 21.8 million barrels of crude oil under various contracts with NNPC Ltd.
- This represents a 25% increase from FY 2021 at 17,445,255 million barrels of crude oil and delivered 1,937,833 MT of refined products compared to 962,371 MT of refined products in FY 2021.
- In its upstream business, Oando’s average daily oil production decreased by 23% to 20,703boe/day from 26,775 boe/day in 2021.
- In 2022, the Company’s production consisted of 4,939bbls/day of crude oil as against 8,849bls/day FYE 2021, 472bbls/day of NGLs and 15,292boe/day of natural gas as a result of production downtimes from shut-in due to repairs and persistent sabotage activities.
In addressing the operational challenges faced during the reporting period, Mr. Adewale Tinubu, Group Chief Executive, Oando PLC, said,
- “The heightened militancy and pipeline vandalism acts within the Niger Delta region dealt a substantial blow to our upstream operations, resulting in a marked reduction in our crude production volumes due to the protracted shut-ins for repair following each incidence.
- This was further compounded by a major gas plant fire incident, which also necessitated a lengthy downtime.”
Strategic Responses and Future Outlook
Despite the financial downturn, Oando states it is optimistic about the future stating that it has implemented strategic measures to enhance security and production, including a comprehensive security framework aimed at curbing pipeline vandalism.
- In addition, Oando states it is actively pursuing growth opportunities to stabilize its operations, such as acquiring the Nigeria Agip Oil Company and venturing into renewable energy projects.
- In 2023, Oando announced several strategic initiatives including partnering with the Lagos State Government on electric mass transit projects and collaborating with the Edo State Government to establish a wind power plant.
- While FY 2022 was marked by significant challenges, Oando’s states that its “proactive strategies and regulatory compliance efforts” indicate a commitment to “returning to profitability” and sustaining its operational capabilities in a challenging market environment.
