Oando to pay N5.1 billion dividend to shareholders

Oando plc recently announced a dividend payout of 75kobo per share, representing a payout of N5.1 billion for the financial year 2012.

Oando is Nigeria’s largest indigenous integrated energy company with operations spanning the value chain – upstream, midstream and downstream.

This level of dividend payout is 60 per cent higher than forecasts from the Rights Issue circular, dated December 19, 2012, of N3.2 billion. It also represents an impressive 49 per cent of profitability payout by the Company to reward its shareholders.

Oando plc revenues of N673 billion have beaten management’s guidance by 6 per cent (N638 billion).

Its gross profit grew by 24 percent fromN65.8 billion to N81.6 billion. Following significant improvements in operating costs (19 percent less than the preceding year), the Company recorded an impressive 76 percent growth in operating profit from N19.3 billion to N34.1 billion.

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Profit after tax increased impressively by 530 percent from N1.7 billion to N10.8 billion as the company moved past its write-downs of the preceding year.

The company’s revenue growth was supported by the commencement of operations of key projects such as the East Horizon Gas pipeline and the Company’s third swamp rig, OES Passion. Future projects are expected to impact revenue and profitability in a similar fashion.

Analysts believe that Oando’s proposed acquisition of Conocophillips entire Nigerian business remains a strong catalyst for future growth.

Pabina Yinkere, led analysts at Vetiva Research said they foresee Oando share price at rising to N19.24 from N 12.50 which it closed yesterday. “In our view, Oando should not be paying out such large dividends given the important funding requirements ahead,” Vetiva analysts said.

Oando has a primary listing on the Nigerian Stock Exchange (NSE) and a secondary listing on the Johannesburg Stock Exchange (JSE). The recent listing of Oando plc Rights Issue shares on Nigerian Stock Exchange and the main board of Johannesburg Stock Exchange pushed the company’s market capitalisation high to N96.672billion (about $604 million).