Top Banner
Oando PLC 1 Oando Plc H1 2012 Performance Review www.oandoplc.com
23

Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oct 16, 2020

Download

Documents

dariahiddleston
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Page 1: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 1

Oando Plc H1 2012

Performance Review

www.oandoplc.com

Page 2: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 2

This presentation does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any Oando Plc (the “Company”) shares or other securities.

This presentation includes certain forward looking statements with respect to certain development projects, potential collaborative partnerships, results of operations and certain plans and objectives of the Company including, in particular and without limitation, the statements regarding potential sales revenues from projects, both current and under development, possible launch dates for new projects, and any revenue and profit guidance. By their very nature forward looking statements involve risk and uncertainty that could cause actual results and developments to differ materially from those expressed or implied. The significant risks related to the Company’s business which could cause the Company’s actual results and developments to differ materially from those forward looking statements are discussed in the Company’s annual report and other filings. All forward looking statements in this presentation are based on information known to the Company on the date hereof. The Company will not publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

Disclaimer

Page 3: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 3

ne

Contents

I

H1, 2012 Operating Environment

II Company Overview

III H1, 2012 Operational Highlights

IV H1, 2012 Financial Highlights

V Q & A

VI Strategic Overview

Page 4: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 4

H1, 2012 Operating Environment

Page 5: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 5

H1, 2012 Operating Environment

7.69% 7.72% 7.40%

7.68%

6.20%

6%

7%

7%

8%

8%

9%

9%

Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

• GDP growth is estimated at 6.2% as at Q1 2012, from 7.1% a year earlier. The January 2012 petrol price hike of about 50% is believed to have played a major role in slowing down growth in the economy.

• Crude oil production declined from a high of 2.40mbopd in February to 2.29mbopd in April. Crude oil price also declined significantly from $113.81/barrel in January to $98.06/barrel in April, following the global economic downturn.

• Inflation rose to 12.9% by June 2012 from 12.6% in January following the petrol price hike. MPR has remained at 12% since October 2011. Source: Renaissance Capital Research; Central Bank of Nigeria (CBN)

Weaker GDP growth (%)

0

20

40

60

80

100

120

140

2.1

2.2

2.3

2.4

2.5

January February March April

Domestic Production Crude Price

Oil Production Volumes and High Crude Oil Prices

mbpd $/barrel

9

9.5

10

10.5

11

11.5

12

12.5

13

0

2

4

6

8

10

12

14

January February March April May June

MPR Inflation

Inflation & MPR (%)

Commentary

Page 6: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 6

H1, 2012 Operating Environment

• Passage of the PIB now appears to be top priority for the government and there is hope that it will be passed this year.

• A draft of the Bill was recently sent from the President of the FGN to the National Assembly for review and debate.

• The start of the year witnessed the partial removal of petrol subsidy, which will reduce the burden on the PSF.

• FGN still contemplating deregulation this year.

• FGN currently verifying subsidy payments to all Oil marketers for the period of H1, 2012.

• Privatization of the Power holding Company of Nigeria’s generation and distribution assets.

• Increase in Multi Year Tariff Order (MYTO)

• Declaration of a gas emergency for the fast track implementation/construction of gas infrastructure to the stranded Independent Power Plants for an immediate increase in daily power generation.

Gas Infrastructure

Power Sector Roadmap

Deregulation/ Subsidy

Petroleum Industry Bill (PIB)

Page 7: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 7

Company Overview

Page 8: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 8

Company overview

Exploration & Production

Energy Services

Gas & Power

Supply & Trading

Marketing

Desc

rip

tio

n

Ke

y

Asse

ts

Ma

rke

t P

osit

ion

• Largest swamp drilling fleet in Nigeria

• Rapidly expanding business line

• Primary assets are located in Nigeria

• 4 swamp rigs: 3 Working Assets and 1 under refurbishment.

• Drill bits and engineering services

• Total fluids management.

• Producing assets: OML 125 & OML 56.

• Development & appraisal: OML 134, OML 90, OML 13 & OPL 236.

• Exploration: OPL 278, OPL 282, OPL 321, OPL 323, OML122 & JDZ

#1 A leading indigenous player

• First private sector company to enter gas distribution in Nigeria

• Consists of:

• GNL

• APL

• EHGC

• CHGC

• 100 km gas distribution pipeline in Lagos.

• 128 km gas pipeline in the East of Nigeria spanning Akwa Ibom and Cross River states.

• Akute captive Power Plant

• Riv Gas.

• Central Processing Facility

#1

• Nigeria’s leading retailer of refined petroleum products with 13% market share in 2011.

• Large distribution footprint with access to over 1,500 trucks and 150m litres storage capacity.

• 500+ retail outlets in Nigeria, Ghana and Togo

• 8 terminals (159.5ML)

• 3 Aviation fuel depots

• 2 lube blending plants (55m litres / annum)

• 7 LPG filling plants

• Trading desks and operations in Nigeria and Bermuda.

• Trading consultants in the UK and Singapore.

• Largest indigenous supply and trading player in the sub-Saharan region.

• 12% market share in PMS importation in 2011.

#1 #1

Oando is the leading indigenous oil and gas player in Nigeria

Upstream Division Midstream Division Downstream Division

Page 9: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 9

H1, 2012 Operational Highlights

Page 10: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 10

H1, 2012 Operational Update

Exploration & Production

Energy Services

Gas & Power

Supply & Trading

Marketing

H1

20

12 U

pd

ate

Third rig, Passion, has commenced operations for Shell

Fourth rig, Respect, has arrived in the United States to commence refurbishment

Teamwork and Integrity have 95% uptime rate.

Well successfully drilled on Ob-Ob OML 56, production testing in process. Increased production expected this year.

Akepo Field development is 70% complete, technical oil expected this year.

Signed a farm-in agreement for 40% participation interest in Qua Ibo (OML 13)

EHGC: commenced supply of gas to anchor customer, UNICEM. Excess capacity to be contracted by Q4, 2012 to the FGN.

Gaslink pipeline and Akute Power continue to generate revenue for the Group.

Deregulation of PMS led to industry strikes, resulting in reduced sales volumes across country.

Repositioning and upgrade of storage and distribution facilities

LPG strategy on track with delivery of 343k cylinders.

Deregulation of PMS effective Jan 1, 2012, leading to price hike and strikes: crippling importation of all products.

Outcome: New PMS price of N97 per litre.

Importation regularized by end Q1.

OST has 12% market share in private PMS importation and is largest white product importer into WAF.

Upstream Division Midstream Division Downstream Division

• Third rig, OES Passion, has now been deployed and has commenced operations with an IOC.

• EHGC has commenced the supply of gas to its anchor customer, UNICEM, with other opportunities also being explored.

• Production increase from assets under development.

Guaranteed Revenue Drivers for FYE 2012

Page 11: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 11

Explanation of Subsidy Programme

The difference between the higher cost of imported PMS as ascertained by PPPRA and the ex-depot price is the subsidy that is repaid to importers after being subjected to an audit by Government appointed auditors. For example, the total cost of PMS imported product is as detailed below as at 6 Dec 2011 and 2 July 2012 respectively:

This Claim is neither profit, nor is it a benefit of PSF, It is a recovery of verified cost already incurred in the supply of PMS to consumers.

Total Cost of Imported PMS (A) N141.38

Ex-Depot Price (B) N55.90

Subsidy Claim (A-B) N85.48

N130.79

N87.66

N43.13

Pump Price N65.00 N97.00

Beneficiaries of the Subsidy on PMS

ANY MEMBER OF THE PUBLIC WHO BOUGHT PETROL OR USED PETROL BOUGHT AT N65 PER LITRE (NOW N97 PER LITRE BENEFITED FROM THE PSF AND WAS A BENEFICIARY OF SUBSIDY. Oando participated in the Subsidy Fund as claimants who were entitled to reimbursement of costs incurred in the importation and delivery of petrol into Nigeria. Claiming subsidy under the PSF for reimbursement is neither an unwholesome act nor is it illegal.

Description PMS ( N/LITRE )

6 Dec 2011 2 July 2012

Page 12: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 12

H1, 2012 Financial Highlights

Page 13: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 13

H1, 2012 Profit & Loss Highlights

31%

-4%

-10%

NGN’ Million H1 2012 H1 2011 Variance

Turnover 350,609 267,812 31%

Gross Margin 33,988 31,518 8%

Non-interest Expenses (18,012) (16,370) 10%

Other Operating Income 2,896 3,996 (27%)

EBITDA 18,874 20,868 (10%)

Interest Expenses (3,954) (3,794) 4%

Depreciation and Amortization (4,504) (4,088) 10%

Profit before Tax (PBT) 10,416 12,977 (20%)

Profit after Tax (PAT)/Net Profit 6,606 6,856 (4%)

Gross Margin Percentage

9% 12% (25%)

EPS (based on 2,274Mn Shares) 2.90 3.01 (4%)

Turnover of N350.6 Billion

EBITDA of N18.9 Billion

Profit after Tax of N6.6 Billion

Page 14: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 14

Group Balance Sheet Highlights

15%

-7%

48%

EBITDA of

NGN’ Million H1 2012 H1 2011 Variance

Fixed Assets 183,752 159,508 15%

Non-current receivables 33,253 29,083 14%

Stock 42,671 30,745 39%

Trade and other Debtors 172,254 116,012 48%

Bank and cash balances 13,820 16,686 (17%)

Trade and other Creditors 130,190 92,746 41%

Short Term Borrowings 132,391 69,493 91%

Long Borrowings 88,897 95,230 (7%)

Equity & Reserves 94,824 99,871 (1%)

Fixed Assets of N183.8Bn

LT Borrowing of N88.9M

Trade & Other Debtors of N172.3M

Page 15: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 15

Group Debt Breakdown

Short Term,

N132Bn

Long Term, N89Bn OEPL,

N71Bn

OES, N60Bn

OGP, N22Bn

OST, N66Bn

GRP, N2Bn

Total Debt N221Bn Applied Divisional Debt Divisional Debt OEPL, N12Bn OES,

N9Bn

OGP, N24Bn

OST, N66Bn

OMP, N42Bn

GRP, N68Bn

As at 29 June, 2012

Exploration & Production

Energy Services

Gas & Power

Supply & Trading

Marketing

Use

of

Fu

nd

s

Rig Acquisition

Rig refurbishment

Drill Bits

Asset Acquisition

Signature Bonuses

Farm-in Fees

Asset Development

EHGC Pipeline

CNG project

Gaslink customer connects

Import Finance facilities and CPs for white product importation

Page 16: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 16

Divisional Performance Analysis

NGN Million Marketing

Supply & Trading

Gas & Power

Energy Services

Exploration & Production

Revenue 123,049 251,199 9,332 9,151 11,714

Gross Margin 10,073 4,872 2,445 6,252 7,822

EBITDA 3,217 2,226 3,052 4,324 7,209

Profit before Tax (PBT) 1,826 2,213 1,880 214 2,705

Profit after Tax (PAT) 1,246 2,053 1,368 146 366

Net Profit Margin 1.0% 0.7% 14.7% 1.6% 3.1%

-42% 87%

74%

-72%

-86%

OMPLC OST OGP OES OEPL

H1 2011

H1 2012

Gro

ss P

rofi

t P

AT

An

aly

sis

Total Group figures do not equal sum of individual entities due to intercompany adjustments (sales, interest, etc) and

corporate center activities.

Page 17: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 17

Divisional Performance Analysis Tu

rno

ve

r – N

35

0.6

Bill

ion

OEPL 3%

OES 2% OGP

2%

OST 62%

OMP 31%

OEPL 36%

OES 22%

OGP 15%

OST 11%

OMP 16%

OEPL 25%

OES 20%

OGP 8%

OST 15%

OMP 32%

OEPL 7%

OES 3%

OGP 26%

OST 40%

OMP 24%

EB

ITD

A –

N1

8.9

Bill

ion

G

ross M

arg

in –

N3

3.9

Billio

n

PA

T –

N6

.6 B

illion

Total Group figures do not equal sum of individual entities due to intercompany adjustments (sales, interest, etc) and

corporate center activities.

Page 18: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 18

Exploration & Production

NGN Million H1 2012 H1 2011 Variance

Revenue 11,714 15,263 (23%)

Gross Margin 7,822 11,512 (32%)

EBITDA 7,209 10,244 (30%)

EBITDA Margin 61.5% 67.1% -

Profit before Tax (PBT) 2,705 7,017 (61%)

Profit after Tax (PAT)/Net Profit 366 2,659 (86%)

Net Profit Margin 3.1% 17.4% -

Sector Performance - Upstream

Energy Services

NGN Million H1 2012 H1 2011 Variance

Revenue 9,151 7,275 26%

Gross Margin 6,252 6,062 3%

EBITDA 4,324 4,107 5%

EBITDA Margin 47.3% 56.5% -

Profit before Tax (PBT) 214 818 (74%)

Profit after Tax (PAT)/Net Profit 146 519 (72%)

Net Profit Margin 1.6% 7.1% -

Page 19: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 19

Gas & Power

Sector Performance - Midstream

NGN Million H1 2012 H1 2011 Variance

Revenue 9,332 7,738 21%

Gross Margin 2,445 2,343 4%

EBITDA 3,052 2,026 51%

EBITDA Margin 32.7% 26.2% -

Profit before Tax (PBT) 1,880 1,123 67%

Profit after Tax (PAT)/Net Profit 1,368 786 74%

Net Profit Margin 14.7% 10.2% -

Page 20: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 20

Supply & Trading

Sector Performance - Downstream

NGN Million H1 2012 H1 2011 Variance

Revenue 251,199 157,594 59%

Gross Margin 4,872 2,728 79%

EBITDA 2,226 1,232 81%

EBITDA Margin 0.9% 0.8% -

Profit before Tax (PBT) 2,213 1,128 96%

Profit after Tax (PAT)/Net Profit 2,053 1,095 87%

Net Profit Margin 0.8% 0.7% -

Oando Marketing

NGN Million H1 2012 H1 2011 Variance

Revenue 123,049 100,041 23%

Gross Margin 10,073 10,716 (6%)

EBITDA 3,217 5,092 (37%)

EBITDA Margin 2.6% 5.1% -

Profit before Tax (PBT) 1,826 3,123 (42%)

Profit after Tax (PAT)/Net Profit 1,246 2,127 (42%)

Net Profit Margin 1.0% 2.1% -

Page 21: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 21

Strategic Overview

Page 22: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 22

Transformation from a downstream giant to a full value chain indigenous champion across West Africa

Strategic Overview C

urr

en

t

•Fully refurbish and deploy 4th rig into operation.

•Enhance Production from assets (5kbopd to 10kbopd

•Accelerate near term acquisition opportunities

(50mmbbls)

• Complete construction:

• GL4

• CNG

• CHGC

• Sell 90% of current franchise capacity

• Intensify white product supply by leveraging efficiencies

• Intensify new product offerings

• Increase distribution efficiency and expansion into high margin volumes, Lubes & LPG distribution

Exploration & Production

Energy Services

Gas & Power

Supply & Trading

Marketing Terminals

•Development of the Marina Jetty and subsea pipelines in the Lagos Port

Mid

Te

rm

•Leverage local content policy opportunities

•Expand product offering (MWD, etc)

• Harness preferential resource access to dormant acreage due to indigenous status

• Production 20-50kbopd

• Reserves 2P: 100 – 150 mmbbls

• Commence construction of:

• EIIJ pipeline franchise

• OBOB

• Substantially increase crude oil market share

• Increase white products market dominance by leveraging new import infrastructure.

• Divestment of up to 49% and listing on the NSE

•Development of a 210,000MT terminal facility in Lekki Free Trade Zone

Lo

ng

Te

rm •Consolidation of

position as market leader and expansion into other countries

• Production 50-100kbopd

• Reserves 2P: 300mmbbls

Through a mixture of organic growth and acquisitions

•Commence construction of 1st CPF and 2 more gas pipeline franchise areas in Nigeria

• Increase geographical presence

•Expansion of business across the sub-Saharan region

•Expand white product storage facilities in Nigeria

Upstream Division Midstream Division Downstream Division

Page 23: Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the PIB now appears to be top priority for the government and there is hope that it

Oando PLC 23

www.oandoplc.com

Q & A