Oando faces profitability challenges as negative equity hits N192bn

Oando Plc Oando Plc may soon be battling profitability challenges with a negative equity that has declined from N129 billion in 2021 to N197 billion in 2022, coupled with a current liability of N1.19 trillion.

A look at its recently released full year 2022 financial statements reflects the financial struggles of the group as its losses in 2022 drove its retained losses to N568 billion, from N480.6 billion in 2021.

The release marks the first time since 2022 that Oando has made public its financial statements, despite being listed on two exchanges, the Nigerian Exchange (NGX) and the Johannesburg Stock Exchange (JSE). 

The group posted a loss after tax of N81.2 billion during the year. This marks a significant decline from the N32.9 billion profit after tax recorded in 2021. 

Other key highlights from the financial statement include a profit/loss before tax of N61.8 billion (-239 per cent) year-on-year, profit/loss of N81.2 billion representing -347.2 per cent year-on-year and a retained losses of –N568 billion which represented a -15.4 per cent year-on-year.

A look at the books of Oando Plc reflects the financial struggles of the group as its losses in 2022 drove its retained losses to N568 billion, from N480.6 billion in 2021.

The group as of December 31, 2022, had current borrowings of N396.9 billion, with its non-current borrowings at about N110.5 billion. 

A summary of the current loans shows that the group’s obligation on a 6-year corporate finance facility taken in 2014 was about N100.6 billion in 2022. The purpose of the facility was to acquire ConocoPhilips’s Nigerian business back in 2014. 

Since March 2021, Oando Plc has been in a legal debacle, when its minority shareholders petitioned the Federal High Court in Lagos for either the majority shareholder, Ocean and Oil Development Partners (OODP) or Oando to buyout their shareholding. 

OODP then filed a cross-petition noting that it would buy out all the minority shareholders of Oando via a court-ordered Scheme of Arrangement. This case was readjourned again on February 6, 2024, to April 17, 2024. 

The decision to delist from the NGX depends on the resolution of the legal dispute, as the court order, dated June 7, 2022, mandating Oando to submit its scheme of arrangement to the SEC, is currently under challenge in court.

Recall that the Johannesburg Stock Exchange had on March 27, 2024, suspended the listing of Oando Plc on its exchange due to the inability to meet the extended deadline for releasing its 2022 accounts.