Oando Plc, a prominent Nigerian energy company listed on both the Nigerian Exchange (NGX) and the Johannesburg Stock Exchange (JSE), has released its financial statements for the fiscal year 2022, revealing significant losses and mounting financial difficulties. This disclosure comes amidst ongoing legal disputes and regulatory challenges, underscoring the company’s turbulent period.
In its FY 2022 financial report, Oando Plc disclosed a staggering loss after tax amounting to N81.2 billion, marking a substantial decline from the N32.9 billion profit after tax recorded in the previous fiscal year of 2021. Additionally, the company reported a negative equity of N197.2 billion for 2022, representing a notable 34.6% increase from the negative equity of N129 billion reported in 2021.
Despite its status as a dual-listed entity, this release marks the first public disclosure of Oando’s financial statements since 2022, raising concerns among investors and stakeholders about the company’s financial health and transparency.
A breakdown of key financial metrics highlights the extent of Oando’s challenges:
– Revenue: The company reported revenue of N1.99 trillion, reflecting a substantial 147.7% year-on-year increase.
– Cost of Sales: Oando’s cost of sales amounted to N1.92 trillion, indicating a significant 151.4% year-on-year increase.
– Gross Profit: Despite the revenue growth, the company’s gross profit stood at N78.6 billion, representing an 83.4% year-on-year increase.
– Operating Profit: Oando reported an operating profit of N20.6 billion, marking a notable decline of 73.9% year-on-year.
– Net Finance Costs: The company’s net finance costs amounted to N81.6 billion, reflecting a substantial 136.5% year-on-year increase.
– Profit/(Loss) Before Tax: Oando reported a loss of N61.8 billion before tax, representing a significant 239.0% year-on-year decrease.
– Total Assets and Equity: Total assets increased to N1.25 trillion, while total equity declined to negative N197.2 billion, indicating significant financial strain.
An analysis of Oando’s financial position reveals the severity of its challenges, as the company’s losses in 2022 contributed to a significant increase in retained losses and negative equity. The company’s current liabilities, coupled with its declining equity, paint a concerning picture of its financial stability.
Adding to Oando’s woes are ongoing legal disputes dating back to March 2021, when minority shareholders petitioned the Federal High Court in Lagos for a buyout of their shares. The company’s majority shareholder, Ocean and Oil Development Partners (OODP), responded by filing a cross-petition, seeking to buy out all minority shareholders through a court-ordered Scheme of Arrangement.
The resolution of these legal disputes is crucial for Oando’s future, as the company’s decision to delist from the NGX depends on the outcome. Furthermore, a court order mandating Oando to submit its scheme of arrangement to the Securities and Exchange Commission (SEC) is currently being contested in court.
In a recent setback, the Johannesburg Stock Exchange suspended the listing of Oando Plc on March 27, 2024, due to the company’s failure to meet the extended deadline for releasing its 2022 accounts. This suspension underscores the mounting challenges faced by Oando and raises questions about its ability to navigate the turbulent waters ahead.
Oando Plc’s release of its FY 2022 financial statements has shed light on the company’s dire financial situation, marked by substantial losses and negative equity. With legal disputes and regulatory challenges looming, the path forward for Oando remains uncertain, leaving investors and stakeholders anxiously awaiting developments in the coming months.
Credit: Nairametrics (Text Excluding Headline)
