Oando swells shareholders’ wealth with N2.4bn dividend payout

Nigeria’s leading indigenous Oil and Gas producer, Oando, has boosted shareholders wealth with a N2.4 billion dividend payout, as it continues to embark on projects that will place the company on a growth trajectory.

“We have the capacity to undertake any projects,” said Wale Tinubu, the Group Chief Executive Officer, at the 37th Annual General Meeting of the company yesterday. “We will be paying an interim dividend to shareholders,” He said while addressing shareholders.

The Board of Oando recommended a 30K dividend for the 2013 financial year and an interim 70K dividend for the six months ended June 30, 2014, which amounted to N2.4 billion at N1 per share.

According to Wale Tinubu, the company would have been able to pay  a dividend of N1 but for the acquisition of Conoco Philips, which resulted in N15 billion in interest payments.

“We spent the whole of 2013 to get approval for the acquisition of Conoco Philips,” he said.

It will be recalled that Oando acquired Conoco Philips Nigeria, for a consideration of $1.5 billion, a strategic move that transformed the company into Nigeria’s largest indigenous oil and gas producer.

The acquisition is expected to increase the company’s daily oil production exponentially by 600% equivalent to 45,000 boe/d, annual revenue of over US$600 million, and annual free cash flows of $150 million, according to an email statement by the company.

Today, Oando’s global position is 60th in terms of production, while it is number one in Nigeria.

Wale Tinubu further said that the company sold   over 14,000 barrels a day at $97. “Over the next three years, regardless of the drop in international  price, we will still sell 14,000 barrels.”

The investment of the company is beginning to yield fruit, as bottom line performance were stellar and impressive.

For the first six months through June 2014, Oando’s profit after tax (PAT) surged by 110 percent to N8.9 billion from N4.27 billion the same period of the corresponding year (HY) 2013.

The company has a better management of direct costs attributable to projects, as gross profit spiked by 68 percent to N50.5 billion from N30.23 billion the preceding year.

In the first half of 2014, the company has already seen positive indications from its active strategic initiatives; upstream investments, midstream expansion and downstream optimisation, according to  an emailed  statement by the company.

“Based on its Q2 2014 performance, it is likely to exit the year with a N24 billion to N30 billion profit,” said the statement.

In the midstream, Oando Gas and Power is extending its natural gas distribution network by 8km from Ijora to the Marina business district in Lagos state, positioning the company to benefit from the growing demand for gas and power infrastructure in the country.

“With an eye to the future, we took on our largest and most daring feat with the acquisition of ConocoPhillips Nigeria, adding capacity to support our future growth plans,”said Tinubu.

BALA AUGIE