Oil, Gas Index Rises Sharply as Oando Gains 508% in 2024
Oil and gas index led the sectoral gain in the equities market in 2024, up by more than 160% due to significant gain reported by Oando Energy. In the local bourse, Oando Energy Plc gained 508.29% to settle at N66 per share as investors appreciated the company’s expansion by acquisition focus amidst uncertainties in the global commodities market.
Data revealed that the energy company’s stock annual gain actually declined following a weak earnings performance in the third quarter of 2024. The company’s market value which settled at N820 billion had crossed N1 trillion in the second half of 2024 before massive selloffs.
Investors dumped Oando following a missed earnings target in the third quarter of 2024. 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.
Investors anticipate steady movement in oil prices in the global commodity market would continue to provide support for Oando Energy earnings performance in 2025.
The sentiment was boosted by successful acquisition, though leverage position has widened, it will be more than compensated for by its enlarged earnings capacity, analysts said. #Oil, Gas Index Rises Sharply as Oando Gains 508% in 2024 Naira Mixed as CBN Turns Aggressive with FX Interventions
