Oando Plc posts N60.27bn profit-after-tax in FY 2023
Oando Plc has released its financial result for the year ending December 31, 2023, posting a Profit-After-Tax (PAT) of N60.27 billion — a reversal from the N81.23 billion loss in the previous year.
This is according to the Group’s audited financial statement for the full year of 2023 where it grew revenues from N1.99 trillion in 2022 to N2.84 trillion in the year under review.
This represents a 43 percent growth in revenues from contracts with customers during the period.
Oando Group’s financial performance during the period was severely impacted by the high cost of sales which gulped a whopping 97 percent of revenues. Cost of sales increased from N1.91 trillion to N2.76 trillion in FY, 2023.
The company’s financial performance shows significant growth in revenue and profitability, with revenues rising by 43 percent year-over-year (YoY) to N2.84 trillion.
However, the cost of sales increased at a faster pace of 45 percent, bringing gross profit growth down to a modest 8 percent YoY at N85.02 billion. This stems from significantly elevated inventory costs.
A key highlight is the sharp rise in other operating income, up by a massive 1,304 percent to N399.98 billion, contributing significantly to the overall profit boost.
This is as a result of foreign exchange gains of N388.02 billion recorded by the company in the period under review representing an increase of 1,079 percent YoY from the same period of 2022.
Despite the surge in operating income, administrative expenses also saw a steep increase of 218 percent YoY, reaching N261.35 billion.
This rise in expenses partially offset the gains, but operating profit still surged by 961 percent YoY to N218.3 billion, driven by both increased revenue and the substantial rise in other operating income.
Finance costs rose by 37 percent to N133.38 billion, although finance income only increased by 7 percent, leading to a net finance cost increase of 30 percent YoY.
Despite these rising financial expenses, the company achieved a profit before tax of N102.97 billion, up by 267 percent YoY.
Overall, Oando Plc benefitted from significant depreciation of the Naira in 2023 since its business operates in a dollar-denominated industry otherwise it would have continued to record another year of loss like in 2022.
For the twelve months ending December 31, 2023, Oando Plc’s total production averaged 23,258 barrels of oil equivalent per day (boe/day), marking a 12 percent increase from 20,703 boe/day in 2022.
Crude oil production rose significantly by 26 percent to 6,211 barrels per day, while natural gas production also grew by 10 percent to 16,808 boe/day.
However, natural gas liquids (NGLs) saw a decline of 49 percent, averaging 239 barrels per day compared to 472 barrels in the previous year.
The Chief Executive Officer of the company Wale Tinubu commenting on the company’s performance stated thus, “Despite the operational hurdles occasioned by security breaches and persistent pipeline vandalism in the Niger Delta, we achieved a profit after tax of N60 billion, bolstered by the strength of our global trading alliances, a 12 percent increase in total production, and favourable exchange gains from our foreign currency denominated assets.”
He further explained that the company’s recent acquisition of NAOC Ltd is a key milestone, enhancing our reserves and infrastructure significantly.
It hopes to build on its 2014 purchase of ConocoPhillips’ Nigerian unit, which aligns with its strategy to grow reserves and production by taking over assets from exiting international oil companies.
