Oando delivers N77.5bn turnover in 2009 First Quarter Results

Financial Indicators

• Turnover was N77.5bn compared to N69.4bn in Q1 2008, a growth rate of 12%. Turnover increased on the back of increased activity in all business divisions
• Gross margin increased 42% over Q1 2008. Gross margin efficiency increased to 8.2% in first quarter of 2009, from 6.5% for the same period last year
• Earnings before interest, taxes, depreciation and amortization (EBITDA) of N4.66bn in 2009, against N2.4bn in Q1 2008,  an increase of 94%
• Profit after tax increased 30% over Q1 2008 from N1.4bn to N1.8bn in 2009, due largely to a combination of improved margin line, cost containment effort and efficient debt management
• Earnings Per Share increased 30% to N2.01

Operational highlights

• Strong performance from exploration division and traditional downstream business
• Marketing business delivered results well ahead of prior year due to stable Petroleum subsidy fund (PSF) management, high trade volume and efficient supply chain management
• Non-marketing businesses continue to contribute significantly to Group bottom-line, further supporting our strategic decision to diversify our earnings platform

Commenting on the results, Mr. Wale Tinubu states; “We are pleased to announce a first quarter results driven by unprecedented achievements recorded in our upstream business and consolidated by earnings from long-established downstream activities. Despite a hostile operating business environment, exchange rate fluctuation and decline in global crude prices, most of our divisions delivered strong results, performing well above the same period last year.”

Commenting further, Mr. Tinubu said, “Our aggressive growth in the first quarter of 2009 is a consequence of improved margin efficiency, seamless supply chain administration upheld by proactive cash management, efficient working capital realignment and our resilience in spite of militating macro-economic factors. Most importantly, this growth underlines Oando’s commitment to maximize shareholder wealth in 2009.”

The ongoing construction of 128km of pipeline for the South-East gas pipeline project and the captive power plant, once completed will drive future profitability and sustainability of the group.

The company anticipates profitability to be sustained throughout the year on the back of increased non-marketing revenue as drilling campaigns commence, increased offtake of gas from our expanded pipeline network whilst it continues to extract optimal value from its traditional marketing and supply and trading businesses as the government pursues deregulation agenda.

“The outlook for the rest of the year is positive and is anchored on our unwavering commitment to be Africa’s truly integrated energy solutions provider”, Mr. Tinubu said.