Oando Soars by 26%, NAOC Consolidation Boosts Investors Confidence
The indigenous oil company Oando Plc’s market value soared by about 26% in the equities segment of the Nigerian Exchange (NGX) as consolidation of Nigeria Agip Oil Company (NAOC) in the group earnings boosted investors’ confidence.
According to data obtained from the Nigerian Exchange, Oando’s share price rose sharply to N56.85 at the close of the trading session on Thursday, when 21.208 million units valued at N1.204 billion were traded in the local bourse.
The energy stock experienced an all-week rally that lifted the market value of the indigenous oil company to N706.725 billion. The trading pattern suggested that investors have been watching out for catalysts that supported the bargain hunting.
Ahead of the release of its 2024 audited report, Oando has experienced sharp volatility in the equities market. The sell pressures plunged the market value of the energy company to N500 billion from a 52-week high of N1.223 trillion, according to data screened by MarketForces Africa.
After much delay, Oando released its audited 2024 results last week, which showed a strong earnings spike following the consolidation of NAOC earnings into the group results. Oando Plc’s profit after tax soared by 267% year-on-year to N220 billion, according to details from the company’s audited report. The company hinted that the spike in earnings followed the consolidation of Nigeria Agip Oil Company’s assets and liabilities into the group.
Its group revenue jumped up by 44% to ₦4.1 trillion from ₦2.9 trillion in 2023, driven by higher upstream output and FX gains. Profit after tax is up 267% to ₦220 billion from ₦60 billion, while the company’s capital expenditure totalled ₦19 billion, a significant decline from ₦45 billion in 2023.
The company reported a significant earnings boost post-consolidation, while capital expenditure eased in the period. Oando indicated that the reduction in capital expenditure reflected its focus on completing the NAOC acquisition, adding that development activity is expected to ramp up in 2025.
On its expansion drive, the company also hinted that it has upped its reserve-based facility from the Africa Import and Export Bank to $375 million. The facility is expected to support the group’s plan to ramp up capital expenditure in the year, and analysts said the decision could drive earnings growth further despite uncertainties in the global energy market. Nigerian Exchange Lost N70bn over Selloffs in Tier-1 Banks
