Integrated energy group, Oando Plc, on Monday presented its unaudited financials for the nine-month ended September 30, 2019, showing a decline in revenue, with the management successfully keeping costs of sales down.
The company was however not able to do the same to administrative expenses, which bloated by N12.93bn or 28.69% from N45.061bn in the first three quarters of 2018, to N57.992bn; just as finance income stayed flat, as costs went north. One major highlight of the result was that, as in results from its recent past, profit after tax however stood at N13.064bn, from N10.396bn, on the strength of the N22.297bn income tax credit, up from the previous N5.623bn in 2018.
The result showed that revenue for the period fell by N91.326bn or 18.08%, from N505.085bn in 2018, to N413.759bn. The drop arose from the significant income decline from N207.777bn recorded in the quarter between July and September 2018, to just N98.35bn in the corresponding period of this year.
A further breakdown of the numbers revealed that income from its exploration & production segment stood at N96.06bn; outpaced by the N304.312bn from supply & trading; while the corporate and other segment contributed N13.386bn.
Year-to-date, the cost of sales for the group dropped to N351.46bn from N427.539bn; resulting in N62.298bn gross profit, down from N77.545bn.
Other operating income, however, jumped from N2.152bn in 2018 to N4.183bn; there was an N11.269bn reversal of impairment of the group’s assets; as against the N5.977bn impairment of assets reported in the corresponding period of last year. After considering administrative expenses, operating profit for the period fell by N8.899bn or 31.05%, from N28.659bn in 2018 to N19.76bn; with N9.694bn from the exploration and production segment; and N8.383bn from corporate & other; while supplying and trading lagged behind with just N1.681bn.
Finance costs for the period climbed to N34.096bn from N31.19bn; just as finance income stood at N7.083bn from N7.6bn; as a result of which net finance costs rose from N23.589bn to N27.011bn, driven by the N13.649bn from E&P; N12.93bn from corporate and other; even as S&T pooled N431.982m.
Loss before income tax and continuing operations for the period amounted to N9.233bn, as against the profit of N4.772bn recorded during the preceding nine-month. The biggest loss-making segment was the corporate and other with N6.528bn, and N3.954bn from E&P; as S&T reported PBT of N1.249bn. A breakdown of the tax credit showed that the lion’s share of N26.547bn came from E&P; followed by N4.25bn from Corporate and other segments. Net profit by segment showed that E&P posted N22.593bn; and S&T, N1.249bn; as corporate and other recorded a loss of N10.778.
Earnings Per Share for the period rose to 68 kobo from 32 kobo.
A statement on Tuesday by Oando Plc’s management blamed, drop in earnings of some companies on “volatility in the economic and business climate (that) impacted negatively on the earnings of some companies. “
Without a doubt, it continued, “2019 has been another challenging year for the company, not just in terms of external factors beyond its control but an ongoing conundrum with the regulator.
Despite this, Oando Plc said results show that its management team “has worked aggressively to maintain a trend of positive results reflected in higher production and profit after tax.
The statement noted that oil production grew by 8% to 43,045boe/day from 40,039boe/day in Year-to-Da (YTD) September 2018, driven by an 11% increase in natural gas production and an 8% increase in crude oil production.
The group also announced that through its upstream subsidiary, its existing Senior Secured Facility was reduced from $450m facility, which constituted a portion of a total of $900m in debt raised towards the Company’s $1.8 billion acquisition of Conoco Phillips Nigerian business in 2014.
“The hope is that the company will sustain the momentum and continue on this winning streak in the final quarter of the year and positively impact the Capital Market and stakeholders alike,” the statement added.