Oando Plc · NSENG:OANDO
Oando — FY2016 & Q1 2017 Earnings Presentation
37 slides from Oando's earnings presentation, 2017
Slide 1: Facts Behind The Figures
Facts Behind The Figures FYE 2016 & Q1 2017 Performance Review Presented by Wale Tinubu - Group Chief Executive www.oandoplc.com
Slide 2: Disclaimer
Disclaimer This presentation includes certain forward looking statements with respect to regulatory authorities) or they may be reasonably anticipated economic This presentation does not constitute an certain development projects, potential collaborative partnerships, results of conditions in the ca
Slide 3: Content
Content Strategic Overview 04 Asset Overview 07 FYE 2016 Operational Update 09 FYE 2016 Financial Highlights 13 Q1 2017 Operational Update 22 Q1 2017 Financial Highlights 24 Strategic Highlights 33 Q&A 37 3
Slide 4: Strategic Overview
Strategic Overview
Slide 5: Industry Challenges in 2016
Industry Challenges in 2016 Low Oil Price Foreign Exchange Volatility < $50/bbl Oando Strategy Cash Flow Asset rationalization Joint Venture Challenges Capital injection FUNDING Balance sheet optimisation Focus on dollar denominated high Niger Delta margin businesses Hedge crude oil production MILIT
Slide 6: 5-Point Strategic Agenda
5-Point Strategic Agenda The new organization is driven by the achievement of our 5-Point Strategic Agenda US$210million Downstream N108billion Debt Restructure with Recapitalization by HV Investments 11 Nigerian Banks Expansion of Downstream Refinance Oando debt footprint across West Africa Lower i
Slide 7: Asset Overview
Asset Overview
Slide 8: Asset Overview
Asset Overview Description Operational Assets UPSTREAM Largest indigenous Producing assets; OMLs 60-63, OML 125, OML 56 & OML 13 producer in Nigeria Development assets; OML 90, OML 122, OML 134 Exploration & Exploration assets; EEZ 5, EEZ 12, OML 321 & 323, OML 131 Production and OML 145
Slide 9: FYE 2016 Operational Update
FYE 2016 Operational Update
Slide 10: FYE 2016 Operational Update (1/3)
FYE 2016 Operational Update (1/3) Upstream Division 2P Reserves increased by 5% from 445mmboe in 2015 to 469.3mmboe due to reservoir performance Oando concluded the sale of its interests in OMLs 125 and 134 to the Operators for cash proceeds of $5.5m and assumption of $88.5m in cash call liabilities
Slide 11: FYE 2016 Operational Update (2/3)
FYE 2016 Operational Update (2/3) Midstream Division Oando Gas & Power commences development of a 20 mmscf/day Mini-LNG facility in Ajaokuta, Kogi State which will service a 1,000km radius in the Northern region of Nigeria with a current 200% subscription of total gas capacity Oand Gas and Power (OG
Slide 12: FYE 2016 Operational Update (3/3)
FYE 2016 Operational Update (3/3) Downstream Division Oando PLC concluded recapitalization of its downstream subsidiary via the injection of USD210million from Helios/Vitol JV. Oando Trading witnessed continued growth resulting in a 106% increase in traded volumes of Crude Oil and Refined Petroleum
Slide 13: FYE 2016 Financial Highlights
FYE 2016 Financial Highlights
Slide 14: FYE 2016 Profit & Loss Highlights Vs. FYE 2015
FYE 2016 Profit & Loss Highlights Vs. FYE 2015 Turnover EBITDA Profit After Tax 49 % 51 % 107% N 569 Bn N 71Bn N 3.5 Bn N’Million FYE 2016 FYE 2015 Variance Turnover 569,197 381,741 49% Gross Margin 48,553 77,676 (37%) Non-interest Expenses (84,480) (70,350) 20% Other Operating Income 106,923 39,759
Slide 15: FYE 2015 Reconciled (As a result of OGP HFS)
FYE 2015 Reconciled (As a result of OGP HFS) N’Million FYE 2015 Discontinued 2015 as Operations Reported Revenue 161,490 41,942 203,432 Gross Profit 54,737 (8,078) 46,659 Other Operating Income (1,566) 33,515 35,080 Selling & Marketing Costs (47) 46.504 - Administrative Expenses (74,078) 4,308 (69,7
Slide 16: FYE 2016 Performance Review (1/3)
FYE 2016 Performance Review (1/3) Turnover Turnover for the period increased by N187bn, 49% above actual in comparative period in 2015 due to; Increase of N337bn from DSDP & OPA Reduced by: Downstream: 6 months in 2016 vs 12 months in 2015 of N130bn. 49 % OES: 3 months in 2016 vs 12 months in 2015 o
Slide 17: FYE 2016 Performance Review (2/3)
FYE 2016 Performance Review (2/3) Non-interest Expenses Non-interest expenses for the period increased by N14.1bn, 20% above actual in comparative period due to: Increase of N22bn due to foreign exchange loss compared to prior year. Increase of N7.6bn G & A in OER arising from foreign exchange 20 %
Slide 18: FYE 2016 Performance Review (3/3)
FYE 2016 Performance Review (3/3) Net Finance Costs Net finance cost decreased by N1.5bn, 3% below prior year due to: Lower financing expenses as a result of debt repayment on reserve based lending (RBL) and corporate facility (CF) – N3.4bn negatively 3% impacted by movement in exchange rate resulti
Slide 19: Group Balance Sheet Highlights
Group Balance Sheet Highlights Long Term Total Fixed Assets Receivables Borrowings 14 % 200% -40 % N 698 Bn N 22Bn N 248 Bn N’Million FYE 2016 FYE 2015 Variance Non-current assets 698,150 614,867 14% Long term receivables 22,034 7,335 200% Stock 12,867 15,159 (15%) Trade and other Debtors 109,304 14
Slide 20: FYE 2016 Balance Sheet Review (1/2)
FYE 2016 Balance Sheet Review (1/2) Non Current Assets PPE and intangibles increased by (14%), N83bn; due to; Capex additions, decommissioning asset and GL4 additions – N12.9bn. Translation differences on opening balances amounted to N256bn. 14 % Disposal of interest in subsidiaries- (N163.9bn). Ass
Slide 21: FYE 2016 Balance Sheet Review (2/2)
FYE 2016 Balance Sheet Review (2/2) Inventory Inventory decreased by N2.3bn due to: Disposal of OES division and Downstream gave rise to -15 % N2.6bn and N10.2bn respectively. Midstream decrease of N367mn OTD had inventory in transit of N10.7bn (2015:nil). Vs. Q1 2015 OER’s inventory increase of N18
Slide 22: Q1 2017 Operational Update
Q1 2017 Operational Update
Slide 23: Operational Update
Operational Update Upstream Division Production decreased to 3.4 MMboe (average 38,125 boe/day) in Q1 2017 compared to 4.5 MMboe (average 49,365 boe/day) in Q1 2016 Approximately 66% of crude production was hedged at $65/bbl average with expiries ranging from July 2017 to January 2019 and further up
Slide 24: Q1 2017 Financial Highlights
Q1 2017 Financial Highlights
Slide 25: Q1 2017 Profit & Loss Highlights Vs. Q1 2016
Q1 2017 Profit & Loss Highlights Vs. Q1 2016 Turnover EBITDA Profit After Tax 116% 36 % -58% N138.4 Bn N 20.8 Bn N 1.7 Bn N’Million Q1 2017 Q1 2016 Variance Turnover 138,413 63,973 116% Gross Margin 13,409 8,786 53% Non-interest Expenses (8,762) (13,839) (37%) Other Operating Income 8,567 25,815 (67
Slide 26: Reconcilation of Q1 2016 Actual to Financial Statements
Reconcilation of Q1 2016 Actual to Financial Statements Discontinued Q1 2016 N’Million Q1 2016 Operations as reported in FS Turnover 63,973 43,494 20,479 Gross Margin 8,786 6,228 2,558 Non-interest Expenses (13,839) (4,880) (8,958) Other Operating Income 25,815 21,090 4,726 EBITDA 20762 22,437 (1,67
Slide 27: Q1 2017 Performance Review (1/4)
Q1 2017 Performance Review (1/4) Turnover Turnover for the period increased by N74.4bn, 116% above actual in comparative period in 2016 due to: Revenue of N115.6bn from OTD’s Direct Sale & Direct Purchase (DSDP) and Offshore Processing Agreement (OPA) against a N4.4bn in 2016. 116% Higher realised o
Slide 28: Q1 2017 Performance Review (2/4)
Q1 2017 Performance Review (2/4) Non-Interest Non-interest expenses for the period decreased by N5.1bn, -37% below actual in Expenses comparative period due to Non-recurring opex from the disposed entities of N5bn. -37% N1.4bn reduction in PLC’s opex compared to prior year Lower expenses of (N656mn)
Slide 29: Q1 2017 Performance Review (3/4)
Q1 2017 Performance Review (3/4) Net Finance Net finance costs decreased by N4.9bn, -38% below prior year due to; Costs N5.2bn reduction in finance cost in PLC largely due to principal amount of the MTL loan being reduced from N108.3bn to N87.3bn in December 2016. -38% Additional reduction of N623mn
Slide 30: Q1 2017 Group Balance Sheet Highlights
Q1 2017 Group Balance Sheet Highlights Fixed Assets LT Receivables Total Borrowings 0 % N 697 Bn 11 % 19.7 N Bn -1% N 244 Bn N’Million Q1 2017 FYE 2016 Variance PPE & Intangibles 697,090 698,150 0% Long term receivables 19,716 22,034 (11%) Inventory 2,419 12,867 (81%) Trade and other debtors 171,557
Slide 31: Q1 2017 Performance Review (4/4)
Q1 2017 Performance Review (4/4) Provision for Tax -73% Provision for tax Higher deferred tax recovery gained on OOL in 2016. Vs. Q1 2016 30
Slide 32: Impact on the Company
Impact on the Company Debt reduced by 39% to N225.9 Reduced interest obligation through billion in Q1 2017 restructruing of overall debt (3 years from N355.4 moratorium on principal) billion in Q1 2016 US$115.8 million equity buy-in of Oando Gas and Power to US$210 million recapitalisation increase
Slide 33: Strategic Highlights
Strategic Highlights
Slide 34: Strategic Highlights (1/3)
Strategic Highlights (1/3) Exploration & Upstream Production Current: 2017 Midterm: 2018 Long Term: 2019 - 2020 Production of ~44 Mboepd Production Target: > Production Target: (2016 Average Net Production) 80kboepd >100kboepd 2P Reserves of 469.3 MMboe 3yr rolling average RR 2P Reserves Target: Inc
Slide 35: Strategic Highlights (2/3)
Strategic Highlights (2/3) Midstream Gas & Power Current: 2017 Midterm: 2018 Long Term: 2019 - 2020 Grow aggregate gas pipeline Grow aggregate gas pipeline Grow aggregate gas pipeline utilization portfolio to an average utilization portfolio to an average utilization/ contracts to an of 70mmscfd of
Slide 36: Strategic Highlights (3/3)
Strategic Highlights (3/3) Downstream Trading Current: 2017 Midterm: 2018 Long Term: 2019 - 2020 Diversify markets, deepen Expand operations across Assets acquisitions to drive relationships with refineries in Africa, specifically to SADC forward expansion into all order to increase West-Africa and
Slide 37: Q&A
Q&A www.oandoplc.com