Oando Grows Turnover By 64% In Third Quarter
By Peter Egwuatu
 21st NOV 2006

Oando Plc, the integrated energy solutions provider with operations geographically spread across West Africa has recorded 64 per cent growth in turnover in its third quarter unaudited results ended September 30, 2006.

Specifically, the company posted N224.03 billion in the period under review while profit after tax increased by 15 per cent to N 2.32billion. Strong performance from new businesses within the Oando group particularly Oando Energy Services and improved product availability were once again the main factors leading to the significant rise in turnover.

Oando, whose primary businesses include Petroleum Marketing, Supply & Trading, Natural Gas distribution, Energy Services and Exploration and Production is listed on both the Nigerian Stock Exchange and the JSE Limited.

Group CEO, Oando Plc, Mr. Wale Tinubu, while commenting on the performance said “It has been another pleasing quarter for the Oando Group. We continue to be well positioned to take advantage of the reform driven environment and legislation in Nigeria, and successfully improved product availability. Furthermore, improved operating profit proves the success of efficient management and cost containment in all businesses.”

He stated that the third quarter results, continues to mirror the marked improvement in performance of the first two quarters over the same period last year, which is in line with Management’s drive to improve profitability through increased operational efficiency and increased market share in the higher margin product lines such as lubricants.

According to him “Turnover for the third quarter of 2006 was N224billion compared to N136.5b last year, representing a growth of 64 per cent. The key drivers of this continue to be the overall increase in business activities especially in our supply and trading business, as well as an increase in products prices. Gross Margin was 4 per cent in the first three quarters of 2006 compared to 6 per cent in the same period last year. This reduction was driven by our supply and trading business which however showed an absolute increase in turnover of 99 per cent; but thin margins in the business drove down the average margins for the group”.

 The company continues to maintain a strong fixed assets base and in September 2006, it has fixed assets valued at N29.5billion compared with about N25.7billion in the third quarter of 2005, a growth of 15 per cent.

Other performance indicators show that current assets increased significantly by 128 per cent to N85.1billion from about N37.4billion in the same period last year.  This is mostly as a result of increased receivables especially in our Oando Energy Services business and higher stock levels which is consistent with growth in turnover.

Long term liabilities showed a slight increase of 2per cent to N3.5billion from N3.4billion in the same period last year. This is a result of the effort the management has made in managing its long term liabilities and thereby managing interest costs and paying liabilities.

According to Tinubu “The Board is of the view that this third quarter results highlights the success the company has continued to achieve in meeting the challenges of  managing its operational costs while fueling the expansion required to meet its vision of becoming the “Premier Company driven by excellence”.

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