Oando Grows Profit By 63%

•Partners Intercontinental Bank On ATM Deployment

Stories By JOHN MEZE

Oando Plc which is  one of the foremost indigenous oil and gas companies playing big in the industry in the country and the only one that  has a primary listing on the Nigerian Stock Exchange and a secondary listing on the JSE Limited (JSE) ,has announced its  unaudited results for the nine months ended September 30, 2008 .
The financial indicators are ,turnover increase of  22percent or $1.71billion about N202 billion from  or N166.4 billion or $1.41billion, gross profit rise of  63percent or N16.4 billion or $138.63million from $85.03million about N100 billion  ,profit after tax attributable to ordinary shareholders rise of 105percent or $47.90million approximately N6.4 billion from $23.31million or N3.5 billion and marked improvement in gross margin .
The company's operational highlights include ;  completion of Lagos Phase Three Project of the gas distribution network  ,marked improvement in contribution from non marketing business and  "First Oil" in "OML 56"
Speaking about the performance the Oando CEO, Wale Tinubu said, "We are pleased to announce today yet another strong performance, with gross profit of $138.63 million, up 63percent over the same period in 2007. This performance, anchored by superior and operating efficiency was largely driven by our Supply and Trading, Marketing and increasingly, Gas and Power businesses. This reflects the diversity and strength of Oando business model along the energy value chain. We are inspired by these results and confident that this positive trend will continue, leading to a robust year end performance."
Consolidated profit after taxation increased by 66percent from $47.90m to $128.77m in the third quarter of 2008. This growth is attributable to increased sales and improved margin recovery. Profit after taxation attributable to ordinary shareholders rose by 105percentto $47.82m from $23.31m, while adjusted earnings per share increased by the same margin from 5.28c.
Oando increased total assets by 119percent from $950m to $2.01bn in September 2008 while total liabilities grew by the same margin all driven mainly by the increased level of business activities. Strategic acquisitions in the upstream sector have led to significant increases in our fixed asset balances, especially in the Energy Services and Exploration & Production businesses. This translated to the 30percent growth in total assets . The Company intends to continue its drive towards building a sustainable business profile anchored on upstream business operations and gas distribution.
The upstream and midstream operations will be the main drivers of Oando's growth in the medium to long term.
The Marketing division is expected to sustain its current leadership role in supply management and on-time delivery of petroleum products to all our outlets. The company recently signed an agreement with a major fast moving consumer goods player thus boosting its non-fuel revenue potential. Efficient management of its working capital; effective supply chain management and trade receivable balances will ensure the company continues to show year on year growth in profitability.
The Supply and Trading division's effort to dominate the West African market is gradually yielding result with the company's strategic alliance with major marketers within the sub-region. As the largest private importer of petroleum products into Nigeria , the Company is expected to leverage on this leadership position to continue to deliver strong performance and guarantee its sustainable growth in the coming years.
The Energy Services division strategic intent is to become the leading service provider to Oil Producers- major and independent in the near future. To this end, the division expect to grow its current fleet of three rigs over the coming years to become the provider of choice while continually seeking to benefit from emerging opportunities that may arise from time to time in the energy service industry.
The Gas and Power division, having completed the phase three project of the Greater Lagos gas distribution network will embark on similar project in the Eastern part of the country through the laying of over 124km gas pipeline for Industrial companies in Akwa Ibom state. The company also intends to build captive power plants around Lagos for discerning users as a demonstration of its readiness to become active player in the power generation and distribution sector. The pioneering effort of the division in this regard should be completed before the end of next year
Lastly, acquisition of strategic upstream assets remains the corner stone of our future profitability and viability. We intend leveraging on the immense value imbedded in our downstream marketing business to unlock the potential that this sector holds for the immediate and future benefit of all stakeholders within the Group Company. Our upstream division recorded a major milestone with the attainment of "first Oil" in one of our upstream assets, "OML 56". Other blocks within the portfolio are expected to attain the same feat in the near future.
Meanwhile , the company in a statement made available to National Mirror, has announced that  its  marketing arm , Oando Marketing Limited,     with over 500 retail outlets in strategic locations across the Federation ,  has,   in its commitment to provide a superior customer service experience at its service stations signed a strategic partnership with Intercontinental Bank mid last week ,  .
According to the statement ,the partnership, seen as strategic,  will see Intercontinental Bank opening up 89 Automated Teller Machines (ATM) dispensing points at 89 Oando service stations nationwide with the placements scheduled to be completed within a 3 month period.
Commenting on the partnership, Mrs. Lara Banjoko, Chief Operating Officer, Oando Marketing, states; “We are pleased with this partnership as it affords our customers easy access to cash to enjoy the unequaled one-stop consumer experience created at our forecourts. Now our customers at their convenience can access cash at our service stations, buy fuel for their cars and visit the groceries for their household needs all in just one location thereby creating more value for our customers and shareholders. That is the dividend of this partnership”.
Responding, Mrs. Chinyere Don-Okhuofu, Head Electronic Banking, Intercontinental Bank, said, “We have decided to partner with Oando because it is a strong brand and a well-run organisation. Our ATMs have recorded tremendous success over time such that we have been rated top by Interswitch as the best ATM operator with the highest number of customer patronage. We are fully aware of the great expectations from this partnership and we are committed to ensuring that the customers enjoy the value-add across all locations of installation”.
It will be recalled that in September, 2008, Oando Marketing in its drive to boost customer experience at its forecourt also launched a partnership with Big Treat PLC, a leading operator in Nigeria fast food sector, to situate their grocery/ convenience outlets in selected Oando service stations nationwide. This partnership has resulted in the opening of 6 Big Treat outlets at selected Oando service stations in Lagos with 6 additional outlets opened in Kano in October.