Oando Plc has released its unaudited financial result for the first half of 2024 posting a pre-tax profit of N45.51 billion.
The company’s financial statement for the first six months of 2024 posted on the NGX revealed that revenues in the period reached N2.03 trillion- an increase from N1.34 trillion generated in the same period of 2023.
In the period under review, the company’s pre-tax profit declined by 178% from N126.86 billion in revenue in the first six months of 2023 to N45.51 billion.
Key Highlights 2024 H1 vs 2023 H1
- Revenues- N2.03 trillion, +51% YoY
- Cost of sales- N1.94 trillion, +50% YoY
- Gross Profit- N82.29 billion, +61% YoY
- Other operating income- N280.2 billion, +9% YoY
- Administrative expenses- N233.35 billion, +76% YoY
- Operating income- N121.93 billion, -30% YoY
- Finance cost- N93.8 billion, +72% YoY
- Net Finance cost- N76.41 billion, +58% YoY
- Profit Before Tax- N45.51 billion, -178% YoY
- Income tax credit- N17.13 billion
- Profit After Tax- N62.64 billion, -44% YoY
- Basic Earnings Per Share (EPS)- N5, -44% YoY
In the three months leading up to June 30, 2024, the company recorded revenues of N810.34 billion and gross profits of N38.71 billion. However, profit after tax for the period N140.37 billion in the second quarter of 2024.
Key drivers
The key drivers of the company’s revenue growth mostly came from its Supply & Trading Business which rose to N1.8 trillion from N1.3 trillion the previous year.
- The supply and trading business involves the sale of petroleum products from Oando Trading Dubai, Oando Trading Bermuda and Oando PLC. However, the segment printed a pre-tax loss of N9.8 billion.
- Revenue from its Exploration and Production business rose to N152.3 billion, more than double the N42.39 billion reported the prior year.
- This segment also contributed N107.7 billion to group pre-tax profits, representing the major driver of profits for the period under review.
- Oando also earned N280 billion in other operating income with foreign exchange gain making up a significant portion of the income. The reevaluation gain also boosted the company’s upstream assets, rising from N1 trillion to N1.5 trillion in the period under review.
External Funding
A cursory review of the company’s balance sheet also shows the group has a total external loan of N1.6 trillion up from N818.3 billion a year earlier.
- The breakdown shows the company obtained an additional N655.5 billion in new loans while it repaid N289.4 billion in the period under review.
- Oando did not break down the sources and other details of its loan balances, however, per its audited accounts for 2023, some of its loans were obtained from Afrexim, Access Bank and Intercompany Loans.
- A significant portion of the company finances came from Afrexim Bank
Some finance deals consummated in the period under review
Project Gazelle: Oando contributed $550 million in a $3.3 billion crude-backed finance deal led by Afreximbank.
Temporary Overdraft: Oando took a N58 billion overdraft for working capital, with a partial repayment and rollover of N42 billion.
FX Forward Contract: Oando agreed to a N16 billion forward contract with Argentil, partially repaying its overdraft facility.
Acquisitions
Oando also provided some updates on some of the acquisitions made in 2024, most of which contributed to its meteoric share price appreciation.
- Shares Sale: M1 Petroleum sold 2.22% of Oando E&P shares to Calabar Power for $30 million, with phased payments completed in 2024.
- NAOC Acquisition: Oando acquired Eni’s NAOC in August 2024, funded by $500 million and $150 million loan facilities.
- Loan for NAOC Assets: Calabar Power secured a $40 million loan, guaranteed by Oando, to acquire a 20% stake in NAOC JV.
Note: An earlier version of this article focused on the Company Results instead of the Group. This has now been updated to reflect the Group Earnings.