At the end of March the company published its FYE 2018 results with the announcement of a third consecutive year of profits.

The company continues to wax strong posting results for the first quarter of 2019 (Q1 2019), with a profit of N4.6 billion PAT which is an 11% increase from the first quarter of 2018 (Q1 2018), despite the volatile nature of the sector and economy.

Oando continues in its unrelenting drive, working assiduously to restore stakeholders’ confidence in its promise to return economic value to shareholders in the very near future.

The company has leveraged on the increase in the price of crude oil which peaked at a little over $66 per barrel in the first quarter of the year, $3 more than the projected average for 2019.

The current stability in oil pricing has also tilted in the favor of the Nigerian economy as the Government predicted a $60 per barrel price in the 2019 budget.

An in-depth analysis of the company’s financials reveals that its turnover grew by 12% to N168 billion from N150.6 billion in Q1 2018; profit-after-tax increased by 11% to N4.6 billion compared with N4.2 billion in Q1 2018.

 The Group also decreased its total borrowings by 5% to N200.9 billion compared to N210.9 billion in FYE 2018 while its long term borrowing decreased by 1% to 75.8 billion compared to N76.8 billion in FYE 2018.

 These figures reflect an increase in production by 11% at 43,745boe/day compared to 39,556boe/day in the same period of 2018 in Oando’s upstream subsidiary.

The company’s production activities reveals that oil production increased by 13% from 14,823bbls/day in Q1 2018 to 16,815bbls/day in Q1 2019, whilst natural gas production increased by 18% from 124,910mcf/day in Q1 2018 to 147,163mcf/day in Q1 2019.

This is in line with the company’s Group Chief Executive Adewale Tinubu’s promise to aggressively grow production organically and inorganically in its upstream business.

Despite its partial divestment from its marketing subsidiary the company continues to increase its market share in the downstream sector through its trading business, Oando Trading which recorded an 11% increase year-on-year, driven by a strong performance in its crude oil trading division and a 3% increase in turnover to $312 million, from $301million.

Commenting on the company’s financials, the Group Chief Executive said: “Our results reflect the progress made over the last few quarters and provides an indication of our expectation for the year. Now that our debt profile is down by 78% from $2.5billion as of December 2014 to $558million, and our de-leverage program is 90% complete with most of our non-core operations divested for good value, we can now focus on steady growth in our upstream entity.’’

In line with the oil and gas sector the Nigerian economy has also been positively impacted by the recovery in oil pricing.

A review of the GDP growth rate shows an increase from 1.8% in Q4 2018 to 2.4% this quarter; a reflection of the current stability in oil price against the steady fall that characterised the industry in the last quarter of 2018 and the stability of the forex market.

As is the nature of commodity pricing nothing is certain, the economic outlook for 2019 indicates that oil prices are likely to fluctuate which would leave Nigeria’s largely oil-driven economy vulnerable.

 Oando has regularly spoken of a realignment in its business operations with a focus on cost optimization, proactive debt reduction to name a few, as a result of learnings taken from the 2014 oil crash, the expectation therefore is that a downward shift in oil prices will not have an adverse effect on the company.

In addition to its positive results Oando has recorded a few milestones in the quarter under review, notably its recent divestment of its 25% residual interest in Axxela Limited to Helios Investment, a leading private equity firm with a focus on investments in Africa, signifying a complete divestment from its midstream business.

The total selling price for its 25% interest was $41,500,000, creating real value from a non-core business activity of the Group.

The move speaks volumes of Oando’s willingness to restructure its business for increased revenue generation by focusing on its dollar-earning businesses, Oando Energy Resources (OER), its exploration and production subsidiary, and Oando Trading its trading business.

The divestment from its naira denominated businesses, specifically its marketing subsidiary which forms the company’s heritage speaks to true courage.

To be so focused on returning value to shareholders even if it means letting go of what were essentially still strong businesses, evidenced by buyers such as Helios and Vitol, the world’s largest independent trader of energy products must be recognized and applauded.

Speaking on the full divestment from Axxela, Wale Tinubu said: “The completion of this divestment signifies another win for the Company. We pioneered the development of Nigeria’s foremost natural gas distribution network which has subsequently grown to become the largest private sector gas distributor in Nigeria creating a lasting impact on both the sector and the Nigerian economy.

The divestment further reinforces Oando’s ability to create value that can be monetized and the Company’s status as the indigenous partner of choice for international companies looking to invest in Nigeria.

 This transaction favorably positions us to significantly reduce our debt profile and remain focused on growth through our dollar denominated businesses.

 We will continue to maintain significant presence in the Midstream as well as grow our gas aspirations via our Upstream gas assets in our NAOC Joint Venture wherein we have four gas projects within the NNPC’s Seven Critical Gas Development Projects (CGDPs), which are responsible for almost 50% of the 42 TCF that will be delivered by the seven CGDPs by 2020.”

Oando’s efforts towards sustainability, youth empowerment and community development remains unflinching. In February, Oando hosted the SDG 16 Innovation Challenge in support of Goal 16 of the United Nations Sustainable Development Goals, which calls for peace, justice and strong institutions in Nigeria.

 This was done in partnership with Accountability Lab, a non-governmental organization and the Canadian Government.

In the same month, the company held a two-day knowledge transfer session with Masters of Oil and Gas Law (LL.M) students from the Strathmore University Law School, Nairobi, Kenya.

Oando was selected by the University as the preferred indigenous sector leader for the academia visit on the basis of its knowledge pool gained from operational experience across the full energy value chain, success stories of pioneering initiatives within the sector, a diverse and local workforce and finally its impact on both the local and African oil and gas industry.

In February Oando and its Joint Venture (JV) partners commissioned six mini water schemes in primary schools in Omoku Central Communities to improve access to potable water for schools in the community.

Market stalls, concrete floors and modern toilets amongst other facilities were also commissioned in Utuechi Community, Ogba/ Egbema/ Ndoni Local Government Area in Rivers State.

Most recently, the company in collaboration with its JV partners held the second edition of the Research and Development Forum/Exhibition of Emerging Technologies in Abuja where it hosted innovators across Nigerian universities as well as private companies.

The aim of the event was to enable academia, research institutes and indigenous companies unveil their technological innovations to a larger and diverse audience of Government officials, bankers and oil and gas companies.

Speaking on the outlook for the rest of the year, Wale Tinubu said: “With ICE Brent Crude Oil price currently at a decent level of USD74.48 per barrel, our efforts will be geared towards increasing our production to sustain profitability and position us on the path to resumption of dividend payment to our shareholders.”

Oando could be rightfully said to be unrelenting in creating value not for itself and its shareholders but for the country at large. If all indices remain in the company’s favor, the company would be well on its way to ending 2019 on a positively high note and possibly paying shareholders long awaited dividends.