Oando losing revenue, lifting profit in 2014


Oando, is losing sales revenue for the second year this year but the company is rebuilding profit rapidly after a huge drop last year. The petroleum company is by its second quarter result likely to remedy an unexpected 87% profit crash in 2013 and push profit to a new peak this year.

Lifting profit from the lowest level in many years to a distant new peak is likely to be the summary of Oando’s operating story in 2014. The company looks ready to beat every other listed company on exceptional profit growth this year. 

The company’s group chief executive officer, Mr. Wale Tinubu seems to be getting to the breakthrough point of all his complex strategic applications that have finally launched the company into a leading energy solutions conglomerate in Africa. He is expecting even more robust financials from the $1.5 billion acquisition of ConocoPhilips’ Nigerian business, which has increased Oando’s scale of upstream operations.

Tinubu’s winning strategy this year is the use of a cost cutting approach to shield and grow profit in a falling sales revenue situation. This has given Oando the highest profit margin seen in many years. Building the biggest profit ever out of two years of declining sales revenue will be a major feat accomplished in Nigeria’s corporate arena in 2014.  

The company closed its second quarter operations in June with a turnover of N194.59 billion, which is a drop of 30.6% from the corresponding period last year. Revenue growth is however expected to step up in the second half of the year. Based on the current growth rate, sales revenue is projected at N395 billion for Oando at full year. This will be a decline of 12.2% from the turnover figure of N449.87 billion the company posted in 2013. It will also mean a drop for the second year after losing 30.8% of its 2012 peak sales revenue last year.

The company achieved stable growth in turnover for three years to 2012 and lost the growth momentum last year. The full year revenue picture for this year is expected to change with the incorporation of new operating activities scheduled to commence in the second half of the year.

The company earned an after tax profit of N8.98 billion at the end of the second quarter, which is a rise of 88.6% year-on-year. This is already more than six times the full year net profit of about N1.40 billion the company reported at the end of 2013.

Based on the current growth rate, full year net profit is projected at N18.50 billion for Oando in 2014 – the highest profit figure in record. This will be an exceptional recovery/growth of 1221.4% in profit for the company – the strongest profit growth likely in the entire group of listed companies this year.

The company had lost its profit growth momentum in 2012 and profit has dropped for the second year from the peak of N14.37 billion it recorded in 2011. With the restructured operations, a change in the rise and fall pattern of profit may be expected. Caution is however required in that the company for now is building profit out of a falling sales revenue, which cannot be sustained. Oando needs to establish a track record of stable growth in sales revenue and profit.

The strength to lift profit this year is built around one major cost cutting success. Cost of sales has fallen by 42.4% to N144.05 billion year-on-year at the end of the second quarter. This is a more rapid drop than the 30.6% loss of sales revenue during the period. This means it cost the company significantly less to generate a unit of sales than in the preceding year. Consequently, gross profit margin has risen by 67.1% to N50.51 billion over the review period, lifting gross profit margin from 10.8% to 26% over the review period.

Administrative cost is the only major expenditure line that moved against the trend of declining costs with a rise of 37% to N25.20 billion. Other operating income dropped alongside sales revenue at 23.4% but a leap of 144.5% in operating profit to N23.69 billion evidences an overall cost reduction during the period.

The high growth in operating profit was moderated by net interest expenses, which surged up by 217.4% to N11.21 billion at the end of the second quarter. A mild reduction in balance sheet debts has happened in the first six months of the year but total borrowings remain huge at close to N239 billion.

Other significant changes in the balance sheet from the 2013 closing position include a jump of 112.9% in cash and bank balances, a rise of 41.4% in trade and other payables and an increase of 32.4% in trade and other receivables. Inventories also closed higher by 27.9% over the same period. The company’s cash flow position has improved with the proceeds of issue of new shares and a significant drop in net cash used for investing activities.

The company earned N1.01 per share at the end of the second quarter, up from 63 kobo in the corresponding period last year. Earnings per share this year is moderated by an increase in the volume of shares coming from a new issue. Earnings per share is projected at N2.08 for Oando at the end of 2014, a rebound from 23 kobo per share in 2013.

The company has proposed an interim dividend of 70 kobo per share for shareholders in the books of the company on 17th November and payment is to be made on 15th December 2014. It is also paying a dividend of 30 kobo per share for its 2013 operations with a qualification date of 30th September and payment date of 17th November 2014.  —The Citizen


  1. I just want to tell you that I am just beginner to blogs and definitely loved you’re web page. More than likely I’m planning to bookmark your blog . You absolutely have awesome article content. Appreciate it for revealing your website page.

  2. I know this if off topic but I’m looking into starting my own weblog and was curious what all is required to get set up? I’m assuming having a blog like yours would cost a pretty penny? I’m not very web smart so I’m not 100% sure. Any suggestions or advice would be greatly appreciated. Kudos

  3. Everything is same unbolt with a clear description of the issues. It was especially informative. Your website is fantastically of use. Be grateful you for sharing!

  4. Full Disclosure began in April 2012 when San Francisco comedian Eric Barry bought a mixer and some microphones, and launched the Full Disclosure sex podcast out of his bedroom, a series of intensely revealing interviews with adult performers, sexologists, celebrities, and others in the entertainment industry.

  5. I blog quite often and I seriously appreciate your content. The article has truly peaked my interest. I will book mark your blog and keep checking for new details about once per week. I opted in for your Feed too.

  6. I am only writing to make you understand what a impressive experience my girl undergone viewing the blog. She came to find plenty of issues, not to mention what it is like to possess a marvelous teaching nature to have folks with ease gain knowledge of certain complex things. You truly did more than our own expectations. I appreciate you for churning out those informative, trusted, informative and even easy tips about this topic to Ethel.

  7. I have to express my appreciation to you just for bailing me out of this type of condition. As a result of checking throughout the world-wide-web and seeing strategies that were not productive, I assumed my life was done. Existing minus the solutions to the problems you’ve sorted out by means of the write-up is a serious case, and the ones which may have negatively affected my entire career if I hadn’t come across your web page. Your primary mastery and kindness in dealing with almost everything was vital. I am not sure what I would’ve done if I had not encountered such a subject like this. I can at this time look ahead to my future. Thanks for your time so much for this specialized and result oriented guide. I will not hesitate to refer your web sites to any person who would like care about this subject matter.

  8. I’m commenting to make you understand what a notable discovery my wife’s child went through going through your webblog. She came to understand numerous issues, not to mention how it is like to have a wonderful teaching character to make many others effortlessly learn about certain tortuous topics. You undoubtedly surpassed our expected results. I appreciate you for distributing those good, healthy, explanatory and also unique guidance on that topic to Sandra.

  9. Thanks so much for providing individuals with an extremely memorable opportunity to read from here. It is often very ideal and jam-packed with a great time for me and my office mates to search the blog really thrice every week to learn the newest items you have got. And definitely, I am certainly fulfilled with all the very good tricks you give. Certain two areas on this page are definitely the very best I have had.

  10. I want to show some thanks to you for rescuing me from this particular challenge. After surfing through the world wide web and seeing ways which are not productive, I was thinking my entire life was over. Being alive minus the solutions to the difficulties you have sorted out by means of your review is a serious case, and those which could have badly damaged my career if I had not come across your blog. That expertise and kindness in handling all the stuff was very helpful. I don’t know what I would have done if I hadn’t discovered such a step like this. I can now relish my future. Thanks very much for your reliable and results-oriented guide. I will not hesitate to propose the blog to any person who needs assistance on this problem.

  11. I together with my buddies ended up looking through the good recommendations from your web blog and all of the sudden I got an awful suspicion I had not thanked the web site owner for those tips. These boys happened to be as a consequence excited to see all of them and already have simply been tapping into them. Many thanks for genuinely very helpful and for using some marvelous themes millions of individuals are really eager to be aware of. My very own sincere apologies for not expressing appreciation to earlier.

  12. I precisely wanted to appreciate you all over again. I do not know the things that I could possibly have done without these tips and hints shown by you concerning this theme. It had become the depressing setting for me, but understanding a specialised approach you processed the issue took me to cry with joy. I’m just happy for this help and then have high hopes you know what a powerful job you’re doing educating people through the use of your blog. I am certain you haven’t encountered all of us.

  13. I as well as my buddies were examining the good points found on your web page then instantly I had an awful feeling I never expressed respect to the blog owner for those techniques. All the young men ended up so thrilled to see all of them and have in effect quite simply been taking advantage of these things. Many thanks for indeed being indeed considerate as well as for finding such fine areas most people are really needing to be aware of. My personal honest regret for not saying thanks to you earlier.


Please enter your comment!
Please enter your name here