An oil worker in Nigeria. Picture: BLOOMBERG/GEORGE OSODI
An oil worker in Nigeria. Picture: BLOOMBERG/GEORGE OSODI

Oando Plc, one of Africa’s largest integrated energy companies, which is under a forensic audit investigation, reported a 46% rise in profit after tax thanks to higher oil prices.

The company, which is listed in Nigeria and Johannesburg, said profits after tax for the nine months to September rose to 10.4-billion naira (R420m). Revenues rose 32% to 505.1-billion naira.

Oando said its performance was further buoyed by sale price increases of 6% for natural gas liquids and 31% for its natural gas deliveries.

Oando group CEO Adewale Tinubu said the positive results were supported by buoyant commodity prices combined with operational efficiency. Brent prices averaged $72.25 a barrel, resulting in a 45% increase in the crude selling price compared to the same period in 2017. Oando’s oil production was also 10% higher for the period.

The company has more than 450-million barrels of reserves and interests in 14 oil licences in Nigeria and the island of São Tomé and Príncipe.

However, it remains in the midst of a shareholder dispute which, in 2017, caused Nigeria’s securities and exchange commission (SEC) to launch a forensic audit to look into various, serious allegations including financial mismanagement and insider trading.

Nigeria’s SEC imposed a six-month long suspension of Oando shares on both the Nigerian and Johannesburg exchanges. The suspension was lifted in April 2018 but the audit report is yet to be released.

On the JSE, Oando shares traded at 30c on Wednesday with a stock market capitalisation of R3.7bn. The share has dropped 57% in value in the past three years.

The group’s borrowing decreased by 4%, to 227.2-billion naira, or R9.15bn. Since the 2014 financial year end — when it acquired oil and gas assets from US multinational ConocoPhillips — Oando’s total group borrowings have been reduced by 52% from 473.3-billion naira, it noted. Meanwhile, capital expenditure for the period also increased from $22.6m in 2017 to $59.3m in 2018.

The outlook for the remainder of the year is positive, Tinubu said and noted that Brent continues to trade at more than $75 a barrel at the start of the fourth quarter, supported by inventory reductions and geopolitical tensions.