We’re On Our Way To Paying Shareholders Long Awaited Dividend- Oando

Buoyed by its positive 2019 first quarter performance, Oando Plc, Nigeria’s leading indigenous energy solutions provider, says it could “be well on its way to ending 2019 on a positively high note and possibly paying shareholders long-awaited dividends.”
It, however, added a caveat: “If all indices remain in the company’s favour” in the months leading to year end.
The result presented to the Nigerian Stock Exchange (NSE) on Thursday, the company noted, is part of an unrelenting drive to restore stakeholder confidence and a promise to return economic value to shareholders in the very near future by a company that remains unrelenting in creating value for the country at large.
Oando Plc posted N4.6bn net profit in the quarter under review, which was 11% better than the first quarter of 2018, while turnover rose 12% to N168bn from N150.6bn, despite what it noted was the volatile nature of the sector and economy. The result was boosted by N9.951bn reversal of receivables, compared to an impairment of N275.886m in the previous first quarter.
The period saw the group’s total borrowings dropping by 5% to N200.9bn from N210.9bn in 2018 full-year, while long term borrowing dropped to N75.8bn from N76.8bn in FYE 2018.
These, the statement noted, followed the 11% increase in production at 43,745boe/day, compared to 39,556boe/day in the same period of 2018 in Oando’s upstream subsidiary, just as oil production increased by 13% from 14,823bbls/day in Q1 2018 to 16,815bbls/day in Q1 2019. Natural gas production grew by 18% from 124,910mcf/day in Q1 2018 to 147,163mcf/day in Q1 2019, which it said is in line with the promise by the Group Chief Executive, Adewale Tinubu to aggressively grow production organically and inorganically in its upstream business.
Furthermore, the group leveraged on the increase crude oil price, which peaked at a little over $66 per barrel in the first quarter of the year, $3 more than the projected average for 2019, which also tilted in favour of the Nigerian economy, coming better than the government’s predicted a $60 per barrel price in the 2019 budget.
Commenting on the financials, Tinubu it reflects “the progress made over the last few quarters and provides an indication of our expectation for the year. Now that our debt profile is down by 78% from $2.5bn as of December 2014 to $558m, and our de-leverage programme is 90% complete with most of our non-core operations divested for good value, we can now focus on steady growth in our upstream entity.’’
Oando recently divested its 25% residual interest in Axxela Limited to Helios Investment, a leading private equity firm with a focus on investments in Africa, signifying a complete divestment from its midstream business for $41.5m, which it said creates real value from non-core business activity.
For Tinubu also, the full divestment from Axxela “signifies another win for the Company, as it helped the group significantly reduce its “debt profile and remain focused on growth through our dollar-denominated businesses.
“We will continue to maintain significant presence in the Midstream as well as grow our gas aspirations via our Upstream gas assets in our NAOC Joint Venture wherein we have four gas projects within the NNPC’s Seven Critical Gas Development Projects (CGDPs), which are responsible for almost 50% of the 42 TCF that will be delivered by the seven CGDPs by 2020,” he stressed.
On the outlook for the rest of the year, the GMD said: “With ICE Brent Crude Oil price currently at a decent level of USD74.48 per barrel, our efforts will be geared towards increasing our production to sustain profitability and position us on the path to a resumption of dividend payment to our shareholders.”