Last Updated on 4 November 2024 by Naijadazz
Oando PLC, Nigeria’s leading indigenous energy group listed on the Nigerian Exchange Limited and the Johannesburg Stock Exchange, has released its unaudited financial results for the six months ending June 30, 2024. The report highlights a resilient performance amidst challenging operating conditions, showcasing the company’s ability to adapt and thrive in the dynamic energy landscape.
Key Highlights
- Revenue Growth: Oando recorded a 51% increase in revenue, reaching N2.03 trillion in H1 2024, up from N1.35 trillion in H1 2023. This significant growth was driven by favorable exchange rate movements and increased crude oil production.
- Profit After Tax: The Group posted a Profit After Tax (PAT) of N62.6 billion, representing a 44% decline from the N112.4 billion achieved in H1 2023. The decrease in PAT was attributed to foreign exchange losses and increased finance costs.
- Operational Adjustments: A 15% decline in total daily production was recorded, primarily due to disruptions from sabotage and theft in the Niger Delta region. However, new production-boosting measures have been introduced, leading to a 36% increase in output within the first 30 days post-acquisition of new assets.
Operational Review
Upstream Operations
- Production Figures: For H1 2024, Oando’s total production averaged 24,389 barrels of oil equivalent per day (boepd), down 7% from 26,140 boepd in H1 2023. This comprised 5,790 barrels per day (bpd) of crude oil, 312 bpd of Natural Gas Liquids (NGLs), and 18,286 boepd of natural gas.
- Impact of Sabotage: Persistent pipeline sabotage and theft contributed to the production shortfall, necessitating frequent well shut-ins for repairs.
- Capital Expenditure: Oando allocated $8.97 million towards developing oil and gas assets in H1 2024, compared to $32.7 million during the same period in 2023, reflecting the Group’s strategic shift to optimize capital deployment in response to market conditions.
Trading Operations
- Crude Oil Trading: Oando recorded a 35% decline in traded crude oil volumes, from 16.2 million barrels in H1 2023 to 10.6 million barrels in H1 2024.
- Refined Products: A 55% drop in traded volumes of refined petroleum products was noted, with 451,533 metric tons (MT) traded in H1 2024 versus 1.01 million MT in H1 2023, largely due to reduced market demand.
Financial Performance Analysis
Revenue
Revenue reached N2.03 trillion in H1 2024, a 51% year-on-year increase driven by currency translation gains and crude oil sales. However, lower trading volumes and declines in NGL and natural gas prices partially offset this growth.
Operating Profit
Operating profit for H1 2024 stood at N121.9 billion, a 30% decrease from N175.3 billion in H1 2023. This contraction stemmed from increased administrative expenses due to foreign exchange losses linked to the revaluation of payables and borrowings.
Profit After Tax (PAT)
Oando’s PAT fell by 44%, from N112.4 billion in H1 2023 to N62.6 billion in H1 2024. The reduction was mainly driven by a higher foreign exchange impact on administrative expenses and net finance costs associated with the depreciated local currency.
Realized Prices
- Crude Oil: The average realized price for crude oil improved by 3% to $77.50 per barrel, up from $74.89 per barrel in H1 2023.
- Natural Gas and NGLs: Despite strong crude oil pricing, realized prices for natural gas and NGLs declined by 7% and 41%, respectively, reflecting shifts in global market demand.
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