Oando migrates from loss to N34.7bn profit in 2021 FY

Oando Plc has announced a N34.7billion profit after tax in its 2021 financial year compared to a loss after tax of N140.7billion in 2020 financial year.

The indigenous petroleum company listed on the Nigerian Exchange Limited (NGX) announced 51 per cent turnover increase to N722.5 billion compared to N477.1 billion in the 2022 financial year.

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 40per cent ($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 eight per cent increase in traded crude oil volumes (17,445,256 bbls compared to 16,081,633 bbls in 2020), and a 39 per cent increase in traded refined products (962,370 MT compared to 694,653 MT in 2020) contributed to an overall increase in revenue of 51 per cent (N722.5 billion compared to N477.1 billion in the same period in 2020).

Revenue growth was negatively impacted by a 40per cent decline in production (26,775 boepd compared to 44,550 boepd in 2020) due to increased sabotage activities.

Oando posted 10 per cent total group borrowings, which increased to N460.8 billion compared to N419.6 billion in 2020.

Commenting on the results, Group Chief Executive, Oando, Wale Tinubu, in a statement said: “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.

“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.”

During 2021FY, the company announced an average production at 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 42per cent at OML 60-63, 23 per cent at OML 56 and one per cent decrease at OML 13 respectively. Production decreases was a result of shut-ins for repairs and maintenance and sabotage incidences at the facilities.

In 2021, the Group 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.