WED. 29 MARCH 2023-theGBJournal | Oando PLC, Nigeria’s leading indigenous energy group listed on both the Nigerian and Johannesburg Stock Exchange, Tuesday reported profit-after-tax of N34.7 billion in FYE 2021 compared to loss of N140.7 billion (FYE 2020).
The profit after tax was driven primarily by a higher operating profit, as well as an increase in Finance Income to N44.1 billion (compared to N9.3 billion in 2020).
The Group’s revenue also rose 51% to N722.5 billion compared to N477.1 billion (FYE 2020) while total Group borrowings increased 10% to N460.8 billion compared to N419.6 billion (FYE 2020).
The earnings is in contrast to their reported huge negative earnings in FYE 2020 which was primarily driven by asset impairments of N66 billion as well as a 48% increase in net finance costs to N60 billion (compared to N41 billion in 2019).
Non-Current Receivables to the tune of N29.9 billion has now been reversed while Trade and Other Receivables impairment provisions to the tune of N92.8 billion was also reversed in the year under review.
Operating Profit rose by 206% N78,691 billion in 2021 primarily driven by higher revenue as well as a net reversal of the asset impairments totalling N112.1 billion.
According to Oando, revenue for the period was positively impacted by high product prices, with realized average crude oil price increasing by 105% ($70.12 per barrel compared to $34.21 per barrel in 2020), natural gas by 40% ($9.96/boe compared to $7.13/boe in 2020), and NGL by 27% ($6.98/boe compared to $5.48/boe in 2020).
These, in addition to an 8% increase in traded crude oil volumes (17,445,256 bbls compared to 16,081,633 bbls in 2020), and a 39% increase in traded refined products (962,370 MT compared to 694,653 MT in 2020) contributed to an overall increase in revenue of 51% (N722.5 billion compared to N477.1 billion in the same period in 2020).
During the twelve months ended December 31, 2021, Oando reported average production of 26,775 boe/day, as compared to 44,550 boe/day in 2020. In 2021, production consisted of 8,849 bbls/day of crude oil, 1,699 boe/day of NGLs and 97,363 mcf/day (16,227 boe/day) of natural gas.
Production decreases were 42% at OML 60-63, 23% at OML 56 and 1% decrease at OML 13 respectively.
‘’Production decreases was a result of shut-ins for repairs and maintenance and sabotage incidences at the facilities,’’ the company noted.
During the twelve months to December 31, 2021, the Group also incurred $63.4 million on capital expenditures related to the development of oil and gas assets and exploration and evaluation activities, compared to $83 million in the twelve months to December 31, 2020.
Capital Expenditures in 2021 consisted of $59.2 million at OMLs 60 to 63 incurred on oil and gas properties, $3.3 million at OML 56 and $0.9 million capital expenditure recorded on other assets.
In downstream operations, Oando Trading sold approximately 17 million barrels of crude oil under various contracts in FYE 2021 with the Nigerian National Petroleum Corporation (NNPC) and delivered 962,370 MT of refined products.
“2021 was defined by contrasting themes for Nigerian oil producers, with buoyant oil prices tempered by an increasingly challenging local operating environment. Bullish oil prices throughout the year saw us record a 105% increase in average realized oil sale price whilst a surge in militancy and sabotage across the Niger Delta resulted in a 40% decline in average hydrocarbon production compared to 2020,’’ Wale Tinubu, Group Chief Executive, Oando PLC said while commenting on the results.
He said despite the challenges, a strong revenue performance, coupled with the refund of a longstanding receivable contributed to a Net Profit of N34.7 billion.
‘’As we continue to drive growth of our existing businesses, whilst also exploring creative solutions towards curbing the incessant pipeline sabotage incidences that continue to plague our local industry, we are also committed to investing in climate friendly and bankable energy solutions via Oando Clean Energy Limited, thus expanding our portfolio from Oil and Gas to include nonfossil energy solutions. We will continue to update our esteemed shareholders as progressive developments are made in the coming year”.
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