Nigeria’s oil giant Oando Plc posted a profit after tax of N1.7bn for the first quarter of 2017.
The company announced a turnover of 116 per cent to N138.4bn, with gross profit rising by 53 per cent to N13.4bn compared to the first quarter result of 2016.
The company said in a statement on Monday that it recorded the feat amid low oil prices, production disruptions, reduced oil exports and the attendant economic recession that plagued the oil and gas industry as well as the overall Nigerian economy in the period.
It achieved these earnings growth due to proactive measures put in place to enable the business to cushion the effect of continued economic headwinds.
It said through its upstream subsidiary, Oando Energy Resources (OER), the company adopted a hedge mechanism that ensured the business was protected from fluctuating oil prices, saying the subsidiary, however, recorded a production shortfall due to significant reductions in gas production and delivery caused by a ruptured Gas Transmission System (GTS-4) gas line at OMLs 60 to 63.
It regretted that the Trans Forcados pipeline continued to suffer downtime, resulting in reduced production from its Ebendo field.
Oando said despite these operational challenges, OER recorded a 608% increase in profits; N4.96 billion in the first quarter of 2017 against a profit of N815.5 million for same period in 2016.
It explained that its Downstream Oando Trading (OTD) witnessed a 150% growth in traded volumes and a significant increase of 1718% in turnover to N115.6 billion compared to N4.4 billion the comparative year, adding that it also increased its secured credit lines by N76.6 billion to a total of N214.4 billion, giving it added leverage to further grow the business.
“In the midstream following the partial divestment of Oando Gas and Power to Helios Investment Partners, we successfully concluded the sale of Alausa IPP for a transaction price of N4.6bn. In the downstream, our trading business through direct sale and direct purchase and offshore processing agreement yielded N115.6bn compared to N4.4bn in 2016.”