National Wire About Nigerians, Nigerian Business and Other Stories
FRIDAY EKEOBA
As part of its growth drive, Oando Plc said it has concluded plans to raise $40 billion additional capital which will further boost the company’s development strategy.
Addressing the capital market community on the Lagos floor of the Nigerian Stock Exchange (NSE) during the company’s facts behind the figures in Lagos, Mr. Adewale Tinubu, the group managing director, said they are targeting strategic investors for the fresh capital raising.
He assured investors: “Please be assured that our company is safe and is healthy, he said they are weighing options like discussions with strategic or portfolio investors on the kind of capital injection, whether it would be a convertible loan.
Oando added that they have entered into an agreement with the Federal Government to repair, operate and maintain the brown-field Port Harcourt Refinery in Rivers State, with the target of taking it from 30 percent capacity utilization, first to 100 percent and then 120 percent. With the cash-flow generated from this venture, he said, the group hopes to build a green-field 100 barrels per day capacity refinery within the complex.
The refinery operations, he said, would be in partnership with Italian oil giant- Agip, with Oando’s job being to pre-finance the project, after which “anybody can bring their crude, we would refine.” Tinubu described 2016 as a challenging one, when there was a production decline, added to low oil price and foreign exchange volatility in Nigeria, all of which impacted negatively on the numbers.
lamenting the devastating impact of militancy and other violent activities which he maintained were negatively affecting general production in the Niger Delta, Tinubu described 2016 as a highly challenging year for companies due to foreign exchange challenges, adding that the company was besieged with liquidity constraints, devaluation of the naira and a slump in oil earnings due to low oil prices, exacerbated by the insurgency in the Niger Delta.
Speaking further, he emphasized that the company has mapped out strategies to mitigate the foreign exchange challenges, as 90 per cent of its earnings focus will be on dollar, while 10 per cent will be in naira.
On the midstream, Tinubu said that the company would invest in acquisition of NIPP grid connected power utilities in the current financial year; commencing first, with phased development of gas distribution system in Tema industrial area of Ghana, in 2018.
In the meantime, the company for the financial year ended Dec. 31, 2016, has posted a profit after tax of N3.5 billion, which was against a loss after tax of N47.6 billion posted in the preceding period of 2015.
The current result showed that the company posted a turnover of N569 billion as against N380 billion recorded in the comparative period of 2015, representing an increase of 49 per cent.
Its net debt also reduced by 35 per cent, to N230.6 billion in contrast with N355.4 billion posted in 2015.
Tinubu attributed the performance to its proactive timely execution of its restructuring programme of growth in upstream division, adding that some divestments embarked upon by the company during the period under review resulted in a net debt reduction of 125 billion dollars.
He attributed the company’s return to profitability to focus on dollar denominated earnings, lamenting that 2016 saw the country plunge into a recession for the first time in over two decades.
The NSE Executive Director, Capital Market Mr Haruna Jalo-Waziri commended the company for coming for the facts behind the figures; noting that timely and accurate information helped investors in making the right investment decision.
He equally stressed the need for the company to always comply with good corporate governance, noting that the exchange would continue to provide the needed platform for quoted companies to excel.
