Tinubu Blames Militants For Company Losing Streak

Wale Tinubu, group chief executive, Oando Plc has blamed militant activities and oil production disruptions for the company’s continued losses.

Oando’s half year result showed a 49 percent decrease in gross profit, from N37.1 billion in the first half of 2015 to N19 billion in the half ending on June 30, 2016.

Turnover increased by 18 percent from N212 billion compared to N180 billion in H1 2015, while loss-after-tax decreased by 23%, N27 billion compared to N35 billion H1 2015.

Oando also recorded one-off unrealized foreign exchange losses of N28.6 billion from dollar denominated liabilities as a result of currency devaluation.

The company has been experiencing half-year losses for at least three years running, with Tinubu blaming current losses on insecurity in the Niger Delta.

“The first half of the year has attested to the deplorable state of security in the oil and gas environment in Nigeria,” Tinubu said.

“Having experienced a 25% decline in production volumes arising from the increased disruptions from militant activities.

“On a positive note the company has benefitted from the implementation of the oil price hedge, which has helped to calm the effects of the disruption of production activities and aided in the rapid pay down of the $900 million of Upstream related liabilities at the time of the Conoco Philips Acquisition, to $440 million today.

“We are pleased to have received $210 million into our downstream group representing 70% of our asset disposal plans and also concluded the restructuring of our debt through the N108 Billion medium term note.”

He said with the new foreign exchange policy, the company will have limited forex risk and would focus on profitability through dollar earnings.

“Now that the dollar liquidity position in the country has improved, we have limited the risk of exchange rate volatility by converting a substantial portion of our dollar denominated obligations to naira, thereby matching our dollar liabilities to our dollar generating businesses.

“We reiterate our forward looking business model of a focused upstream and export trading businesses, which will drive profitability through consistent dollar earnings.”