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HOW WALE TINUBU KEPT OANDO IN WINNING WAYS
and shrewd businessman, Adewale Jubril Tinubu, with the sobriquet JAT. The GCEO of Oando Plc, had always proved his vast experience in business with uncommon brilliance and wizardy. So, when he promised OANDO shareholders at
the beginning of 2018 that; he would move the leading Oil and Gas company to an an enviable height, many did not doubt his competence. He had always delievered far above expectation. Today, he has not only fulfilled his promise, he had lifted
Oando far above its competitors.
The continued increase in oil
prices and sales volumes, Nigeria’s exemption from the production cut by
the Organization of Petroleum Exporting Countries (OPEC), capital
discipline and reduced disruptions on production activities in the Niger
Delta are contributing factors to the improved cash flows and
impressive results posted by Oil and Gas companies operating in Nigeria
in the third quarter of 2018.
Underlining how far both majors and
indigenous companies have come since oil prices plummeted in 2014,
Oando PLC recently posted its nine months ended September 2018 results,
with a profit of N10.4 billion, a 46% increase, compared with N7.1
billion in the same period of 2017 and a 70% reduction in debt. In 2014,
the company took out debt to the tune of $900 million towards the $1.6
billion landmark acquisition of ConocoPhillips Nigeria assets; today the
company has achieved a commendable 70% reduction in this debt to
approximately $270 million. These numbers further reinforce the success
of Oando’s ongoing initiatives to create value for stakeholders, and
drive sustainable growth as well as its potential to access new funding
for new projects.
The company had since recovered from the
effects of the oil price crash, with this being its second year of
consecutive profits and its 3rd profit in 2018. Seplat’s
profit-after-tax (PAT) stood at $91 million compared with $5 million in
2017; Total’s adjusted net income increased by 48% to $4 billion
compared to same period in 2017 and was 11% higher than in Q1 2014 when
oil prices were over US$100/bbl; while Eni made a net profit of 1.53
million euors in the third quarter of 2018.
Oando’s 46% jump in
year-on-year quarterly net profits beat market expectations. Despite
being in the middle of an indirect shareholder dispute which has led to a
yet-to-be concluded SEC forensic audit, the company recorded a 32%
increase in its turnover to N505.1 billion from N383.5 billion in
comparative period of 2017, driven by higher commodity prices; while its
gross profit grew by 9% to N77.6 billion from N71.2 billion in 2017.
Speaking
on the company’s financials, Adewale Tinubu said; “Today’s positive
result is further evidence of the progress made by Oando in 2018 driven
by our continued focus on execution and operational efficiency,
supported by buoyant commodity prices.”
Thanks to good
operational efficiency, these results confirm Oando’s ability to take
full advantage of the improved macro environment to deliver on key
corporate imperatives of increased revenues and profit to create value
for her shareholders. As the year draws closer to an end, the management
of Oando must be applauded for their dedication to keeping the company
on course by delivering yet another consecutive quarter of strong
financial performance.
In the exploration and production sector,
Oando’s upstream subsidiary, Oando Energy Resources made a stellar
performance as it benefited from the ramp-up of higher margin production
resulting in a 45% increase in realized crude selling price compared
with the same period in 2017. According to the company’s press
statement, performance was further buoyed by sale price increases of 6%
for Natural Gas Liquids and 31% for natural gas deliveries. In
the downstream, Oando traded over 10 million barrels of crude oil and
ensured petroleum products efficiency through the importation of
445,483MT of refined products.
Commenting further, Oando’s Group
Chief Executive said that; “The outlook for the remainder of the year is
positive and we remain committed to delivering on our value-based
strategy towards improving our liquidity by reducing our gearing,
improving our profitability by increasing production, and achieving
growth via strategic alliances.”
Oando’s continued positive
results and corporate initiatives reinforce the company’s focus on
redefining the role of independent players as vital in supporting the
socio-economic growth of the nation. In 2018, the company has been
particularly active in showcasing to its stakeholders the output from
its day to day operations as well as the positive impact it is having in
the communities it operates in.
In the third quarter of this
year the company in partnership with its Joint Venture partners
commissioned a 20,000 gallon water scheme for the over 5,000 residents
of Agbere Community, Bayelsa State, in the process reducing the number
of Nigerians without access to clean portable water. In the same vein in
the Aggah community in Rivers State the company commissioned asphalt
road and drainage projects, alongside their JV partners, NNPC &
NAOC. Other community projects commissioned include roads and drainage
in Irri Community, Isoko South Local Government Area of Delta State and
in the Oguta Community, Imo State.
More recently in line with the
company’s commitment to Nigerian Content Development, they ran in
collaboration with their JV partners, NAOC and NNPC a series of content
development workshops in Yenagoa, Bayelsa State. These workshops,
carried out in partnership with the Nigerian Content Development
Monitoring Board (NCDMB), focused on compliance best practices,
procurement regulations and business financing strategies to help
improve the quality of output from local contractors as well as the
promotion and development of in-country capacities for the
industrialization of Nigeria.
Speaking on the future outlook for
the company, Wale Tinubu explained that the company would build on this
performance in the coming quarter as well as step up organic and
inorganic development activities across its existing portfolio.