Oando Energy Returns to Profitability with N60bn Net Income
The dual listed Oando Energy Plc has returned to profitability with N60.3 billion in net income, according to its audited financial report for 2023 submitted on the Nigerian Exchange and Johannesburg Stock Exchange.
Oando Plc profit rose to N60.3 billion, reversing N81.2 billion net loss reported in 2022. In the period, revenue increased by 43% to N2.9 trillion from N1.9 trillion, positively impacted by 12% increase in production in financial year 2023, settling at 23,258 boepd from 20,703 boepd in 2022.
Details from its earnings release showed that a significant increase in trading activity, exchange rate translations, and higher oil and natural gas production boosted earnings performance. Oando Trading sold approximately 32.8 million barrels of crude oil under various contracts with NNPC Limited in the financial year 2023.
This feat was offset by lower NGL production volumes and realized price in the period, according to Oando Plc. Operating profit for the period increased by 961%, primarily driven by a revenue surge as well as a significant increase in other operating income.
The company hints that its hefty operating income was largely due to foreign exchange gains on the group’s US dollar denominated monetary assets. On the downside, administrative expenses increase primarily from exchange losses from the impact of the Naira devaluation on foreign currency denominated liabilities.
In 2023, Oando recorded a 23% reduction in upstream borrowings, as part of effort to deleverage balance sheet. At the time, Oando upstream borrowing settle at US$488.9 million from US$635.6 million in 2022.
Commenting on the results Wale Tinubu CON, Group Chief Executive, Oando PLC said: “Despite the operational hurdles occasioned by security breaches and persistent pipeline vandalism in the Niger Delta, we achieved a profit after tax of N60 billion, bolstered by the strength of our global trading alliances, a 12% increase in total production, and favorable exchange gains from our foreign currency denominated assets.
“Our recently completed transformational acquisition of NAOC Ltd stands as a pivotal moment for the Company due to the expansive reserves and vast infrastructure network.
“Following our 2014 acquisition of Conocophillip’s Nigerian unit, this transaction was the next phase in our long-term strategy to increase our reserves and production capacity by leveraging on the exit of the International Oil Companies, whilst securing operational control of the assets.
“Our immediate focus now shifts to a seamless integration and execution of initiatives towards achieving a marked increase in production. We are confident about the opportunities this platform provides and are committed to delivering sustainable value to all stakeholders.”
During the twelve months ending December 31, 2023, average production was 23,258bbl/day, compared to 20,703bbl/day in 2022. In 2023, production consisted of 6,211bbls/day of crude oil,239bbl/day of NGLs and 16,808 boe/day of natural gas.
“Production increase was a result of improved operations, repairs of shut in wells offset by persistent sabotage activities.
“During the twelve months to December 31, 2023, the Group incurred $52.3 million on capital expenditures related to the development of oil and gas assets and exploration and evaluation activities, compared to $101.9 million in the twelve months to December 31, 2022”. #Oando Energy Returns to Profitability with N60bn Net Income CBN Defends Naira with $39m in Forex Market
