Oando, an African energy company, reported an 11 percent increase in profit after tax for the first quarter to end-March to N4.6 billion. Photo: Reuters
DURBAN – Oando, an African energy company, reported an 11 percent increase in profit after tax for the first quarter to end-March to N4.6 billion (R183.50 million), up from N4.2bn in the first quarter of 2018.

Oando has a primary listing on the Nigerian Stock Exchange and an inward listing on the JSE.

CE Wale Tinubu said on Friday that the company’s results reflected the progress made in the past few quarters and provided an indication of their expectations for the year, having reduced its debt significantly.

“Now that our debt profile is down by 78 percent from $2.5bn (R36bn) as of December 2014 to $558m currently, and our de-leverage programme is 90 percent complete with most of our non-core operations divested for good value, we can focus on steady growth in our upstream entity,” Tinubu said.

He added that with Brent crude oil at a decent level of $74.48 a barrel, their efforts would be geared towards increasing their production to sustain profitability and position them on the path to resumption of dividend payments to shareholders.

The Nigerian economy has been revived on the back of increasing oil prices globally. The country’s gross domestic product has risen to 2.4 percent in the first quarter of the year, up from 1.8 percent reported at the end of the fourth quarter of 2018.

During the quarter, turnover grew by 12 percent to N168bn, up from N150.6bn compared with the first quarter of 2018 while total group borrowings declined by 5 percent to N200.9bn, down from N210.9bn compared with the first quarter of 2018.

The group also reported 11 percent increase in production to 43 745 barrels of oil equivalent a day, up from 39 556 barrels of oil equivalent a day compared to the first quarter of 2018.

The group said oil production in particular increased by 13 percent to 16 815 barrels a day in the quarter, up from last year’s 14 823 barrels a day, while natural gas production increased by 18 percent to 14 7163 mcf/day, up from 12 4910 mcf/day reported in the first quarter of 2018. Oando also incurred capital expenditure of $19.3m during the quarter, down from $6.6m compared with last year.

Looking ahead, the group said oil prices have recovered to more than $74 a barrel after reaching a low of $50 a barrel at the end of 2018.

“We expect prices to remain at their current levels in the near term. As a business, our focus will be largely on driving profitability through growth in our upstream business and achieving a further reduction of borrowings."

Oando shares closed 75 percent higher at 21 cents on Friday.

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