Oando PLC, Nigeria’s leading energy group, announced its unaudited results for the fiscal year ending December 31, 2023. The company reported a significant 71% increase in turnover and a profit after tax of N74.7 billion.
Key Financial Highlights
Turnover and Profit
Oando’s turnover rose by 71% to N3.4 trillion in 2023, up from N1.9 trillion in 2022. The company achieved a profit after tax of N74.7 billion, reversing a loss of N81.2 billion in 2022.
| Financial Metric | FYE 2023 | FYE 2022 | % Change |
|---|---|---|---|
| Turnover | N3.4 trillion | N1.9 trillion | 71% |
| Profit After Tax | N74.7 billion | (N81.2 billion) | 192% |
Operational Performance
Upstream Segment
Oando saw a modest 1% increase in total production, averaging 20,837 boepd in 2023, compared to 20,703 boepd in 2022.
| Production Type | FYE 2023 | FYE 2022 | % Change |
|---|---|---|---|
| Crude Oil (bbl/day) | 6,024 | 4,939 | 22% |
| Natural Gas (boe/day) | 14,572 | 15,292 | -5% |
| NGLs (bbl/day) | 241 | 472 | -49% |
| Total (boe/day) | 20,837 | 20,703 | 1% |
Trading Segment
Oando’s traded crude oil volumes increased by 50% to 32.8 million barrels in 2023, up from 21.8 million barrels in 2022. However, traded volumes of refined petroleum products decreased by 15%.
| Traded Volumes | FYE 2023 | FYE 2022 | % Change |
|---|---|---|---|
| Crude Oil (bbls) | 32,792,888 | 21,820,894 | 50% |
| Refined Products (MT) | 1,645,535 | 1,937,833 | -15% |
Financial Review
Oando’s revenue increased by 71%, primarily due to higher trading volumes and favorable exchange rate translations.
| Financial Metrics | FYE 2023 | FYE 2022 | % Change |
|---|---|---|---|
| Revenue | N3,403,475,797 | N1,993,754,362 | 71% |
| Operating Profit | N214,519,985 | N20,584,252 | 924% |
| Profit/(Loss) After Tax | N74,723,154 | (N81,230,816) | 192% |
Price Realizations
The average realized oil price increased by 83% to $109.55 per barrel, compared to $83.15 per barrel in 2022. The average realized natural gas price decreased by 24% to $12.06 per boe. The average realized price for NGLs also fell by 18% to $4.87 per boe.
| Price Realizations | FYE 2023 | FYE 2022 | % Change |
|---|---|---|---|
| Average Realized Oil Price ($/bbl) | $109.55 | $83.15 | 32% |
| Average Realized Gas Price ($/boe) | $12.06 | $14.74 | -18% |
| Average Realized NGL Price ($/boe) | $4.87 | $6.23 | -22% |
Comments from Leadership
Wale Tinubu, Group Chief Executive, commented on the company’s performance. He acknowledged the challenges posed by pipeline vandalism but highlighted strategic global partnerships and net foreign exchange gains as key drivers of the profit increase.
“Despite the persistent pipeline vandalism across the Niger Delta, we achieved a profit after tax of N74.7 billion in 2023 largely driven by increased trading volumes due to our strategic global partnerships and net foreign exchange gains on the group’s foreign currency denominated assets as against losses on our foreign currency denominated liabilities.”
Future Outlook
Tinubu emphasized the significance of the recently signed Sale and Purchase Agreement with Eni for acquiring 100% of the shares of NAOC Ltd. This acquisition is expected to unlock substantial synergies and deliver exceptional value to shareholders.
“Our milestone signing of the Sale and Purchase Agreement with Eni towards the acquisition of 100% of the shares of NAOC Ltd, marked a pivotal moment for our organization and is poised to unlock substantial synergies in the near future.”
Capital Expenditures
Oando’s capital expenditures decreased to $52.9 million in 2023, from $101.9 million in 2022. The majority of these expenditures were related to the development of oil and gas assets.
| Capital Expenditures | FYE 2023 | FYE 2022 |
|---|---|---|
| Total ($ million) | 52.9 | 101.9 |
Upstream Borrowings
The company’s upstream borrowings were reduced by 23%, from $635.6 million in 2022 to $488.9 million in 2023.
Conclusion
Oando PLC’s strong financial performance in 2023 highlights its resilience and strategic focus. The company continues to navigate industry challenges while achieving significant growth and profitability.