The Federal Government, Oando and Agip have reached agreement for the Oando/Agip consortium to manage the Port Harcourt Refinery under a repair, operate and maintain (ROM) public private partnership arrangement.
Chief executive officer, Oando Plc, Mr. Wale Tinubu, who disclosed this, said the parties have signed a Memorandum of Understanding (MoU) while details of the deal are being finalised.
“We also got approval from the President to repair, operate and maintain the Port-Harcourt refinery together with our partner Agip. We plan to increase the refinery capacity from 30 per cent to a 100 per cent, subsequently to 120 per cent,” Tinubu said.
Tinubu spoke at the presentation of facts behind the figures of the Oando group at the Nigerian Stock Exchange (NSE) in Lagos.
He said the first quarter earnings of the group underscore its proactive decision to focus on its dollar denominated export businesses.
“As we continue to chart our deliberate path in this challenging business environment, we look forward to better performance in the quarters to come,” Tinubu said.
Oando’s shares have been major rallying force for the continuing rally at the stock market. Stocks hit a four-month high earlier this week, lifted by gains in Nigeria’s largest indigenous energy conglomerate, Oando and improved investor sentiment towards the country’s recession-hit economy. The stock market had gained N117 billion by Tuesday this week to extend a bullish eight-day run, while Oando rose by 131 per cent, its highest level in 18 months.
Analysts at Afrinvest Limited said that the upbeat performance in the equities market was mainly driven by solid first quarter 2017 earnings, as well as the knock-on effect of improved foreign exchange liquidity.
Oando acquired a N108 billion medium-term-loan with 11 Nigerian banks; this medium term 5-year consolidated facility, with a 3 year moratorium on principal, enabled the overall restructure of the Group’s obligations.
In Q1 2017, Oando’s turnover grew by 116% to N138.4 billion and gross profit by 53% to N13.4 billion compared to the first quarter of 2016. Profit-Before-Tax increased by 207% to N494 million compared to (N461 million) in the first quarter of 2016 while profit-after-tax decreased by 58% to N1.7 billion compared to N4.1 billion in Q1 2016.
The bullish performance of the NSE further affirms the International Monetary Fund’s (IMF) projection that Nigeria’s economic growth would rise by 0.8% in 2017. The IMF said: “After contracting by 1.5 percent in 2016 because of disruptions in the oil sector coupled with foreign exchange, power, and fuel shortages, output in Nigeria is projected to grow by 0.8 percent in 2017 as a result of a recovery in oil production, continued growth in agriculture, and higher public investment.”
This will in turn impact the economic growth of the country, projected to rise to 2.6 percent in 2017 and 3.5 percent in 2018.
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