Oando Plc posted a profit after tax of N1.7bn for the first quarter of 2017.
The oil and gas 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.
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.
It attributed the earnings growth to proactive measures put in place to enable the business to cushion the effect of continued economic headwinds.
Through its upstream subsidiary, Oando Energy Resources, the company said it had consistently adopted a hedge mechanism that ensured the business was protected from fluctuating oil prices.
Approximately 66 per cent of the company’s crude production was hedged with 9,590 barrels of oil per day of crude oil production hedged at $65 per barrel (average) with expiries ranging from July 2017 to January 2019, it explained.
Commenting on the result, the Group Chief Executive, Oando Plc, Mr. Wale Tinubu, was quoted as saying, “Following a successful restructuring in 2016, we are pleased with our Q1 2017 results, which reflect a return to normalcy and growth in spite of continued security challenges, economic headwinds and a fluctuation in crude prices.”
The company has continued to reduce its net debt, quelling any concerns of critiques; as of March 2017, it stood at N225.9bn, a 29 per cent reduction from N316.6bn in March 2016.
“In the upstream, production in the first quarter of 2017 decreased to 38,125 barrels of oil equivalents per day compared to 49,365 boe/day in Q1 2016. However, due to decreased production expenses, Oando Energy Resources recorded a profit of N4.96bn in the first quarter of 2017 compared with a profit of N815.5m in the prior year comparative period.
“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.”
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