Oando Energy Profit Dips by 31% as FX Exposures Impact Earnings
Oando Energy Plc. profit after-tax slowed down by 31% at the end of third quarter of financial year 2024, its unaudited numbers showed.
Profit-after-tax for the period was N76.3 billion, representing a decline of 31%, driven by foreign exchange losses and net finance costs. Revenue grew by 36% year on year to N3.189trillion at the end of 9M in financial year 2024 from N2.349trillion in the comparable period in 2023.
The management believes the heavy revenue was positively impacted by exchange rate translations and higher crude oil volumes lifted in the period.
It was also noted that the strong revenue performance was offset by lower trading volumes, reduced natural gas and NGL volumes, and lower realised sale prices for natural gas and NGL.
Hence, operating profit for the period declined by 23%, primarily driven by an increase in administrative expenses mainly due to foreign exchange losses from the revaluation of payables and borrowings.
With the release of third quarter earnings results, Oando Energy Plc has cleared all outstanding financial reports expected to be submitted to market regulators. Its share price surged to N68.9 in the local bourse on Monday, from N64.
Commenting on the results, Wale Tinubu CON, Group Chief Executive, Oando PLC, said: “Our performance for the nine months ended September 30, 2024, reflects our resilience and unwavering focus on delivering value amidst a challenging operating environment.
“We achieved a 36% increase in revenue to N3.2 trillion and a profit after tax of N76.3 billion, despite ongoing pipeline vandalism, sabotage, theft in the Niger Delta, and foreign exchange volatility.
“Since the acquisition of NAOC, we have increased production by 40%, growing from 22,000 boepd pre-acquisition to 30,675 boepd currently. This progress has been driven by the deployment of quick-win strategies that have enhanced operational efficiencies and demonstrated the transformative potential of the acquisition.
“The integration process is advancing smoothly, and our immediate focus remains on executing strategic initiatives to maximize the value of our expanded portfolio. With this stronger foundation and a clear roadmap for growth, we are confident in our ability to deliver long-term, sustainable value to all stakeholders.”
During the nine months ended September 30, 2024, average production was 20,560 boe/day, compared to 21,529 boe/day in 2023. In 2024, production consisted of 6,525 bbls/day of crude oil, 254 bbl/day of NGLs and 13,782 boe/day of natural gas.
“Production decrease was a result of increased shut-in wells for repairs from sabotage and theft related activities. During the nine months to September 30, 2024, the Group incurred $12.7 million on capital expenditure related to the development of oil and gas assets and exploration and evaluation activities, compared to $47.4 million in the nine months to September 30, 2023” #Oando Energy Profit Dips by 31% as FX Exposures Impact Earnings#
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