Oando PLC’s Q3 2024 financial report highlights a compelling story of resilience, with the company reporting an impressive N3.2 trillion in revenue—representing a 36% year-on-year growth. This growth comes despite a 5% production cut caused by pipeline vandalism and crude oil theft.
Impact of Production Challenges
The company’s daily production dropped to 20,560 barrels of oil equivalent (boe) compared to 21,529 boe/day in the same period last year. These setbacks stem from recurring incidents of sabotage and theft, which continue to plague Nigeria’s oil sector.
In August 2024, Oando acquired the Nigerian Agip Oil Company (NAOC) for $783 million, a move that has significantly boosted its production. Post-acquisition, daily output rose by 40% to 30,675 boe/day.
Group Chief Executive Wale Tinubu described the acquisition as a transformative step, positioning Oando to focus on upstream operations—a less volatile segment compared to downstream activities.
Revenue Grows, but Profitability Declines
While revenue surged due to increased crude oil liftings, profitability told a different story. A 23% drop in year-on-year profit was reported, attributed to:
- Foreign Exchange Losses: The weakening naira has driven up operational costs.
- Inflationary Pressures: Rising administrative expenses have further squeezed profit margins.
Oando’s financial resilience reflects its ability to adapt under pressure. The shift toward upstream operations, supported by the AGIP acquisition, lays a robust foundation for sustainable growth despite the persistent risks of sabotage and theft in the Niger Delta.
A Path Toward Sustainable Growth
To mitigate these risks, Oando must adopt enhanced security measures, foster government collaboration, and invest in innovative technologies. While shareholders may need to exercise patience, the company’s trajectory signals progress.
As earlier reported by 9am News Nigeria, Oando’s strategic realignment and operational focus suggest that the company is poised to navigate these challenges and secure long-term growth.
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