Financial Recovery with Impressive Revenue Growth
Oando Plc has posted a remarkable turnaround with a profit-after-tax of N60.3 billion for the 2023 financial year, contrasting sharply with the N81.2 billion loss it reported in 2022. The energy firm’s revenue surged by 43% to reach N2.84 trillion, compared to N1.99 trillion in 2022. However, the rising cost of sales, which absorbed 97% of this revenue, limited the company’s gross profit growth to N85.02 billion.
Operating Profit and Rising Expenses
Despite challenges, Oando’s operating profit saw a substantial increase, climbing by 961% to N218.3 billion. This growth was partly offset by administrative expenses, which spiked by 218% to N261.35 billion. The company also faced a 30% rise in net finance costs, totaling N116.47 billion, highlighting pressures from high operational costs even as profitability improved.
Profits Before and After Tax See Significant Gains
Oando’s profit-before-tax for 2023 hit N102.97 billion, marking a 267% increase from the prior year. After accounting for income tax expenses of N42.7 billion, the company achieved a profit-after-tax of N60.3 billion, reflecting a 174% improvement. Analysts note that Oando’s financial recovery has added considerable value for stakeholders after a turbulent financial year in 2022.
Impact of Wale Tinubu’s Leadership and Market Value Surge
Under the leadership of Wale Tinubu, Oando’s market value surged, jumping from N74 billion in early 2023 to N1 trillion by September 2024. During this period, the company’s share price soared from six naira to N92, positioning Oando among the top 10 most valuable companies on the Nigerian stock exchange. Observers attribute part of this growth to strategic acquisitions and market confidence under Tinubu’s tenure.
Major Acquisitions in the Energy Sector
In August 2024, Oando completed a $783 million acquisition of Nigerian Agip Oil Company (NAOC) from Eni, an Italian energy firm. Reports indicate that this acquisition was part of Eni’s strategy to secure partnerships in Nigeria’s oil sector, specifically in the OPL 245 oil field with Shell. Oando’s subsidiary, OVH Energy Marketing Limited, also acquired the retail arm of the Nigerian National Petroleum Company (NNPC), further expanding its foothold in Nigeria’s energy sector.
Public Concerns Over Strategic Ties and Privileges
Oando’s resurgence has sparked public interest and concern, with analysts questioning the potential influence of Wale Tinubu’s familial connection to President Bola Tinubu. While the company has denied any misuse of this association, its rapid growth and sector dominance raise questions about the role of political ties in business success. Nevertheless, Oando’s impressive turnaround reflects strategic moves and resilience amid an evolving Nigerian economy.
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