Oando grows after tax profit by 53%

investors look to another good year.

The very impressive performance points to another good year for the shareholders of the leading integrated energy solutions provider whose operations are widely spread across West Africa.

Already the market is responding to the performance as the price of the stock at the market has maintained upward movement to N83 naira as at Friday, from about N71 at which it traded about two weeks ago.

The company in a statement signed by Tokumbo Durosaro, general manager, corporate communications, attributed the growth in profits to significant contributions from non-marketing operations of the energy group. "This further underscores the strategic decision to continually diversify our operational base along the energy supply chain," she noted.

She said, "This current performance is driven by the positive contribution from our subsidiaries and the efficient utilization of working capital, coupled with value extraction from group synergies along the value chain."

Consequently, the profit attributable to the group grew by 44 percent from N2.00 billion to N2.88 billion. This growth in the Group performance results from the increased benefits accruing to our shareholders following the new structure in place and the effects of the Share Swap exercise that was completed during the period under review.

Turnover for the period under review stood at N174.28b a 12 percent increase compared to N155.73 billion in the previous year. The key drivers according to her remain improved business activities along the supply chain within the Group coupled with product price increases.

She explained that turnover within the quarter increased by 25 percent while the cumulative increase of 12 percent was against the backdrop of a dip in turnover in the second quarter occasioned by several man-hours that were lost to industrial and general strike and election holidays.

The third quarter earnings before interest, taxes, depreciation and amortization (EBITDA) of the company stood at N 6.96bn in 2007, against the N5.37 billion, a 30 percent improvement. The growth in EBITDA is attributable to improve pump margin, improved Non-fuel revenue income base and efficient cost curtailment effort of management that have seen administrative expense increasing marginally by 5 percent despite increase in volume of business activities

Commenting on the result, Wale Tinubu, group chief executive, Oando Plc states, "The group is pleased to report continued impressive profit growth in the third quarter. This was mainly as a result of a huge improvement in the contribution from our non-marketing business which benefited from increased business activities, as well as sustained product availability in our traditional marketing business," Tinubu said.

"Higher oil prices also contributed positively through improved margins. The positive performance and increasing opportunities in the energy sector further support Oando’s strategic decision to continue diversifying and expanding our operations base," Tinubu said.

He said third quarter results highlight the company’s unwavering commitment to enhancing stakeholder value, with expectation for a stable outlook for the rest of the year and thus looks forward to a robust performance by year end.

Tinubu said Oando shall relentlessly seek to expand its diversified platform in a bid to become the largest integrated energy solutions provider in Africa.

He noted that the current performance and future projection supports this strategic in-sight. Already the Supply and Trading business is well positioned to fully tap into opportunities along the supply chain; the Energy Services business has been fully re-engineered to meet the immediate and future challenges, while the Gas and Power Company is poised to continue to maintain its leadership position in natural gas distribution through incursions into West African.

"With our aggressive cost containment strategies, ambitious and promising initiatives, and a management staff alert to the enormous opportunities in the business, there is a huge potential for growth in the coming months and years," he said.

Oando emerged the winner of the 2007 edition of the Nigerian Stock Exchange President’s Merit Award for the petroleum products marketing sector. This is in recognition of the company’s performance and compliance with operational standards as required in the market.

With increasing opportunities in the upstream, exploration & production, gas and power, Oando is geared towards attaining the apex position in the energy sector by continually diversifying and expanding its business lines. The company gave assurance that the shareholders will reap from the benefits that would accrue as a result.

The Board is of the view that this third quarter results highlights the success the company has continued to achieve in meeting the challenges of managing its diversified platform with a view of actualizing its vision of becoming Africa’s Leading integrated energy company driven by excellence.