Oando plc has paid a gross dividend of N16.39 billion in the last five years in line with its determination to create value for its shareholders, even as industry sources have said shareholders should expect a bountiful harvest for the year ahead.
Despite the challenging operating environment, Oando has been recording profit over the years and rewarding shareholders with dividend and bonus issues. Between 2006 and 2010, for instance, the company paid a total dividend of N16.39 billion to shareholders.
In addition to the dividend, shareholders have also received bonus issues twice within the review period.
The industry sources based their bullish outlook on the impressive results for the first nine months of 2012 and the bright prospects for the years ahead.
Oando’s profit for the nine months through September 2012 climbed to $59.7 million from $56.9 million a year earlier, it said in October. Revenue rose to $3.1 billion from $2.6 billion. The company’s shares have risen 20.5 percent this year, compared with a 45.2 percent rise in the Nigerian Stock Exchange All Share Index. Oando’s future performance is expected to be driven by distributed volume of white products and the elevated demand for petroleum products (PMS) in particular, according to analysts.
The past few years have also seen the integrated energy company diversify earnings away from the low margin downstream segments into high margin upstream and midstream; both of which hold the potential of increasing value accretion for shareholders.
Chief Executive Officer Wale Tinubu said Oando’s Nigerian oil output will rise to 100,000 barrels a day by 2015 from the current 10,000 barrels after taking over the assets of Houston- based ConocoPhillips (COP).
Its N54.6 billion ($345 million) rights offer, which ended on Feb. 20, was held to partly fund the acquisition.
Sola Abodurin, the chairman, Ibadan Zone Shareholders’ Association of Nigeria, said, “I expect a good performance from Oando because it has a serious minded management and board that always ensure that value is created for all stakeholders.”
Speaking in the same vein, Moses Igbrude of Independent Shareholders’ Association of Nigeria (ISAN) said the company has made significant investments in recent times and this is the time to expect returns on some of those investments.
“The company is forward looking and has made some significant investments in the area of gas and power sector. As those businesses mature, we expect to see the positive results. I am optimistic that Oando will surpass last year’s performance,” Igbrude said.
Oando’s management gave an indication it would pay a dividend at a meeting last month with stockbrokers. No dividend was paid in 2011.