Oando Plc has announced a profit after tax of N60.3 billion for 2023, reflecting a significant recovery from the losses recorded in 2022. The leading energy solutions company revealed its audited financial results for the year ending December 31, 2023, demonstrating a robust turnaround.
The company reported a 43% increase in revenue, reaching N2.9 trillion compared to N1.9 trillion in 2022. This impressive growth underscores Oando’s successful recovery strategy.
In its statement, Oando highlighted the remarkable shift from a loss in 2022 to a profit of N60.3 billion in 2023, equating to a staggering 961% increase in operating profits, even amid a 24% decline in realized oil prices—averaging $83.15 per barrel in 2023 compared to $109.55 per barrel in the previous year. Similar trends were observed in gas and Natural Gas Liquids (NGL) prices.
The company also noted a significant reduction in upstream borrowings, which decreased by 23%, from $635.6 million in 2022 to $488.9 million in 2023.
Wale Tinubu, Group Chief Executive of Oando Plc, commented on the results: “Despite operational challenges such as security breaches and pipeline vandalism in the Niger Delta, we achieved a profit after tax of N60.3 billion. This success was bolstered by strong global trading alliances, a 12% increase in total production, and favorable exchange gains from our foreign currency-denominated assets.”
He emphasized the strategic importance of the recent acquisition of NAOC Ltd., which enhances the company’s reserves and infrastructure. This acquisition represents a key step in Oando’s long-term strategy to boost production capacity by capitalizing on the exit of International Oil Companies (IOCs).
Looking ahead, Tinubu stated, “Our immediate focus is on seamless integration and executing initiatives to significantly increase production. We are confident in the opportunities this acquisition provides and are dedicated to delivering sustainable value to our stakeholders.”
In 2023, Oando achieved an average production of 23,258 barrels per day (bpd), up from 20,703 bpd in 2022, alongside a 26% increase in daily production to an average of 6,211 barrels. The company also reported a 10% increase in natural gas production, averaging 16,808 barrels of oil equivalent per day.
Oando attributed these production gains to improved operations and repairs of previously shut-in wells, although these were somewhat offset by ongoing sabotage activities.
The company’s operating profit increase was driven by higher revenues and significant foreign exchange gains on US dollar-denominated monetary assets, despite rising administrative expenses due to the devaluation of the Naira.
With this solid financial performance, Oando is well-positioned to leverage opportunities in the energy sector, especially following its recent $783 million acquisition of NAOC, which nearly doubled its total reserves to 1.0 billion barrels of oil equivalent from 505.6 million barrels based on 2022 estimates.
In conjunction with its 2023 financial results, Oando announced that it is current with its reporting obligations and expects the lifting of its recent shares trading suspension, allowing investors to benefit from the company’s promising outlook. The share price has already seen a remarkable 127% increase following the NAOC acquisition.
Looking ahead, Oando will participate as a Diamond Sponsor at the upcoming African Energy Week (AEW) 2024, taking place from November 4 to 8 at the Cape Town International Convention Centre. Themed “Invest in African Energies: Energy Growth Through an Enabling Environment,” the event aims to reshape Africa’s energy development through discussions among industry leaders, investors, and policymakers.
Wale Tinubu is set to deliver a keynote address titled “Transforming Africa’s Energy Landscape through Strategic M&As,” focusing on Oando’s vision for the future of the African energy sector.
Other key executives from Oando will also contribute to discussions at the conference, sharing insights on various topics including e-Mobility adoption and ESG financing in the energy sector. The event promises to be a significant platform for dialogue on the future of Africa’s energy landscape.
