Oando Plc (NGX: OANDO) has released its Audited Consolidated and Separate Financial Statements for the year ended 31 December 2024, reporting a significant increase in revenue, to ₦4.09 trillion in 2024 from ₦2.85 trillion in 2023.
The gross profit nearly doubled, rising 83% to ₦155.9 billion from ₦85 billion in 2023 following a sharp increase in the cost of sales to ₦3.93 trillion.
Despite the improved gross profit, administrative expenses surged significantly to ₦610.9 billion in 2024 for the Group from ₦261.4 billion in 2023. This is nearly 4 times the gross profit.
Nevertheless, profit before tax surged to ₦383.8 billion, a remarkable increase from ₦102.9 billion in 2023 due to a substantial rise in other operating income, totaling approximately ₦1.1 trillion for the Group.
One of the most notable contributors to the other operating income was a gain on bargain purchase amounting to ₦784.8 billion which arose from Oando’s acquisition of Nigerian Agip Oil Company (NAOC)’s onshore assets. as the fair value of the net assets acquired exceeded the purchase consideration. However, this would be a one-off accounting gain.
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Another major contributor, to the Group’s other operating income was foreign exchange gains amounting to over ₦305.9 billion. due to naira devaluation.
Net profit for the year was ₦220.1 billion in 2024, compared to ₦60.3 billion in the previous year.
The basic earnings per share rose to ₦18 from ₦5, indicating enhanced returns for shareholders.
The directors do not propose dividend for the year ended 31 December 2024, similar to 2023.
Financial Position
As of 31 December 2024, Oando’s total assets stood at ₦6.43 trillion, up from ₦2.68 trillion in 2023 as non-current assets grew sharply due to increases in property, plant and equipment, intangible assets, and finance lease receivables.
Despite strong earnings, the company reported negative equity of ₦360.98 billion, impacted primarily by historical accumulated losses and foreign currency translation losses.
Total liabilities amounted to ₦6.8 trillion, driven largely by higher borrowings and decommissioning provisions related to upstream oil operations.
The major components assets include:
- Property, Plant, and Equipment (PPE): valued at ₦3.17 trillion, a jump from ₦1.03 trillion, reflecting increased investments in upstream oil fields and infrastructure following the NAOC asset acquisition.
- Intangible Assets: rose to ₦1.03 trillion, this is linked to oil exploration rights, licenses, and goodwill.
- Finance Lease Receivables: Valued at ₦473.3 billion, these represent receivables from leased infrastructure or energy facilities.
- Cash and Cash Equivalents: stood at ₦221.8 billion, showing improved liquidity from financing activities.
Major Components of Liabilities
On the liabilities side, Oando’s total liabilities stood at ₦6.8 trillion at year-end 2024, up from ₦2.94 trillion in 2023. The increase is primarily linked to debt-financed expansion and provisions related to environmental and legal obligations.
Major components of the liabilities include:
- Borrowings: the largest component amounting to ₦2.77 trillion, up from ₦818 billion. It includes both short- and long-term loans used for acquisitions and working capital.
- Trade and Other Payables: At ₦2.55 trillion.
- Decommissioning Provisions: Rose significantly to ₦698.3 billion, covering expected future costs (short-term and long-term) of shutting down oilfields and restoring the environment.
- Income Tax Liabilities: Reached ₦522.3 billion
Cash Flow Statement
The company experienced a net cash outflow from operating activities of ₦535.3 billion, primarily due to changes in working capital and high interest payments.
Investing activities consumed ₦872.9 billion, including significant acquisitions and capital expenditures.
However, financing activities provided a strong inflow of ₦1.44 trillion, driven by new borrowings.
Overall, Oando ended the year with ₦155.3 billion in cash and cash equivalents, compared to ₦73.3 billion in 2023.In 2024.
Oando PLC spent over ₦1.15 billion on corporate social responsibility initiatives, including education, environmental sustainability, and energy conferences.
The company’s share has surged 10% to N51.7 per share today on NGX following the release of the financial statements.
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.
