Oando: Building Africa’s largest energy company Oando Plc’s landmark acquisition of ConocoPhillips Nigeria oil and gas business, Sulaimon Olanrewaju and Ruth Olurounbi take a look at the Oando brand, its monumental leverages and the possibilities of future growth.
The reaction of the market to the completion of the acquisition of ConocoPhillips by Oando Plc last Wednesday was swift and heart-warming as investors on the Nigerian Stock Exchange (NSE) swooped on the shares of the energy company. Altogether, 43.14 million shares valued at N1.2 billion were traded in 804 deals. This pushed up the value of the stock by N2.47 or 9.7 per cent to close at N27.94 per share.
Investors further reinforced their confidence in the company the following day as it also gained 4kobo to close at N27.98 as 23 million shares valued at N654 million were traded on the floor of the stock exchange.
That is hardly surprising for a company that has been delighting its shareholders with dividend payments and bonus issues. In 2007, Oando paid a dividend of N6.00 per share, while it paid N3.00 in 2008, 2009 and 2010 respectively. Although cash dividends were not paid in 2011 sequel to a decline in profit as a result of one-off write-offs which were a consequence of impairments of assets, acquisitions, and terminate on of technical and managerial services charges, the company declared a bonus issue of one for every four shares held. In 2012, it paid the sum of N5.1 billion in dividend, translating to N0.75 per share. Shareholders are looking forward to an impressive growth as the years roll by.
The financials of the company have similarly been impressive. The group’s turnover increased from N336.9 billion in 2009 to N378.925 billion in 2010, while Profit before Tax (PBT) stood at N24.318 billion compared to N13.512 billion in 2009.
In 2011, Oando’s turnover rose to N586 billion. Also its profit on ordinary activities before exceptional items and taxes rose from N24.31bn in 2010, to N24.55 billion. Its profit after tax, however, fell from N14.37 billion to N3.45 billion.
The company posted a Profit After Tax (PAT) of N10.9 billion and paid N5.1 billion in dividends for the year-ended December 31, 2012, having recorded revenues of N350billion. Gross earnings however dipped in 2013 to N280billion. Consequently, gross profit fell from N31.014 billion to N30.2 billion, while PAT dipped from N6.5 billion to N4.3 billion. The decline was attributed to a reduction in downstream importation due to substantial unpaid outstanding subsidy obligations by the Federal Government. SEE MORE ON PGAE2