Oando loses N184bn in 2014 to ‘break’ NSE record

Oando PLC, one of Nigeria’s indigenous oil companies, recorded a minimum of 131 percent increase in loss, some N183.9 billion in the 2014 fiscal year.

Despite recording a 500-percent increase in total production from 1.5 million barrel of oil equivalent (BOE) in 2013 to 9.1 million in 2014, the company recorded huge losses.

The company, which is listed on the Nigerian and South African stock exchange, finally posted its 2014 fiscal year end results in October 2015, with massively exponential losses after tax.

According to its results, Oando had a turnover decrease of 7 percent, from N457bn in 2013 to N425.7bn in 2014, recording a gross profit increased by 17 percent, from N59.4bn in 2013 to N69.8bn in 2014.

Profit before tax, however, decreased to N176.2bn compared to N7.7bn in 2013, showing an obvious loss of N168.5bn in 2014 FY.

The record-breaking loss came with a profit-after-tax decrease of N183.9bn compared to N1.4bn in 2013, accounting for a 131.36 percent increase in loss with one fiscal year.

With an exception of distressed banks, Oando recorded the largest loss by any company listed on the Nigerian stock exchange.

Responding to losses, the company said 2014 was “a year of extreme volatility in the oil and gas industry,” adding that the year opened with crude oil prices as high as $110 per barrel but closed at $60 – the lowest price in a five-year period.

Wale Tinubu, group chief executive, Oando PLC, said the global industry shaped the company’s financial outcome.

“We thrived in our operational achievements, with a five-fold increase in total production over 2013, but this was adversely countered by the slump in global crude oil prices,” he said.

“In this new pricing reality, we have provisioned for a number of write-downs as a result of reduced activity in the service sector as well as the value of reserves in our legacy portfolio.

“We see this period as a time for prudent consolidation and will be focusing our energies on creating value through optimization of resources, via efficiency in our operations, deleverage and risk management – as demonstrated with our hedging instruments that yielded $234 million in proceeds, whilst, seeking the right opportunity to substantially expand our reserve and production base.”

The energy company has already recorded a loss of N35b in the first half of 2015.