Oando PLC posts N13.6 billion third quarter profit amid increase in supply and trading revenue Nexovant

Oando PLC reported a post-tax profit of N13.6 billion for the third quarter of 2024, ending September 30, a significant improvement from the N2.2 billion loss recorded in the same period last year.

This represents a 510.48% year-on-year increase, bringing the company’s total post-tax profit for the nine months to N76.2 billion.

Revenue for the third quarter stood at N1.1 trillion, a 15.7% rise compared to the previous year, with total revenue for the nine months reaching N3.1 trillion.

The bulk of the group’s nine-month revenue, at N2.9 trillion, came from the supply and trading of crude oil, as well as refined and unrefined petroleum products.

Key financial highlights: 

Revenue: N1.1 trillion, +15.69% YoY
Cost of Sales: N1 trillion, +8.93% YoY
Gross Profit: N112 billion, +174.89% YoY
Other Operating Income: N28.5 billion, +42.06% YoY
Operating Income: N39 billion, +13.69% YoY
Net finance cost: N54.7 billion, +90.85% YoY
Pre-tax loss: N14.3 billion, -351.80% YoY
Post-tax profit: N13.6 billion, +510.48% YoY
Total Assets: N7.8 trillion, +192.97% YoY

Commentary

A cursory look at Oando’s third-quarter 2024 results highlights improved performance despite a significant rise in net finance costs during the period.

The company’s revenue grew by 15.7% year-over-year to N1.1 trillion, with N1 trillion of this coming from the supply and trading of crude, refined, and unrefined petroleum products.

Cost of sales increased by 8.93% to N1 trillion, up from N960.7 billion in the same period last year, but gross profit climbed significantly to N112 billion, a 174.9% jump from N40.7 billion.

‘Other operating income’ rose 42.1% to N28.5 billion, largely driven by foreign exchange gains, which accounted for over 90% of the total, bringing the nine-month figure to N308.7 billion.
Main operating income increased by 13.7% to N39 billion, supported by exploration and production activities involving oil blocks on the Nigerian continental shelf, deep offshore, and São Tomé and Príncipe.
However, net finance costs surged 90.9% year-over-year to N54.7 billion, with 71.4% linked to exploration and production activities.

In all, Oando reported a post-tax profit of N13.6 billion, a notable turnaround from the N2.2 billion loss recorded the previous year, reflecting a 510.6% year-over-year improvement.

Despite recording a post-tax profit, the group’s retained earnings remained in the negative at N441.7 billion, though this marks an improvement from the N506 billion deficit reported the previous year. This lingering shortfall could weigh on the company’s ability to pay dividends.

Group asset performance

The group’s total assets demonstrated substantial growth, rising by 192.97% year-over-year to N7.84 trillion for the nine-month period ending September 30, 2024, compared to N2.68 trillion recorded in the previous year.

Non-current assets saw a notable increase, climbing to N4.53 trillion from N1.86 trillion, largely driven by significant investments in property, plant, and equipment, as well as intangible assets.
Similarly, current assets experienced a remarkable surge, reaching N3.31 trillion from N815.5 billion, supported by strong performance in trade and other receivables, alongside higher cash and cash equivalents.

Investments in finance, lease receivables, and short-term investments also played a key role in the expansion of the asset base.

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