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N292b loss: Stock Exchange slams fines on Oando

In from Success Allantee . . .
The Nigerian Stock Exchange (NSE) has slammed three separate fines on Oando Plc over the delay of its audited report for 2014 and interim report for the first two quarters of this year.
Regulatory documents obtained by Ripples Nigeria indicated that the Exchange slammed a fine of N2.5 million each on the late submission of the audited report and accounts for the year ended December 31, 2014 and the first quarter of this year, and another N1.2 million fine for the second quarter report, bringing total fines to N6.2 million.
Oando delayed the submission of its earnings reports for the three periods and eventually submitted reports that showed huge losses over the period. The company recorded a pre-tax loss of N52.03 billion in the third quarter. It recorded a net loss of N183.9 billion in the year ended December 31, 2014 while net loss after tax stood at N21 billion and N35 billion in the first and second quarters of this year.
The Exchange in a statement on Tuesday said it could impose more sanctions on Oando if ongoing investigations showed additional infractions by the oil and gas company.
The Exchange stated that it has invited the external auditors and the audit committee of Oando Plc as part of an ongoing review of the recent audited and interim financial results of the oil and gas company. The NSE has also notified the Securities and Exchange Commission (SEC) about the ongoing investigation of Oando.
The Exchange said it has started additional investigation into the full-year audited report and accounts of Oando for the year ended December 31, 2014 and the results for the first three quarters of this year. The review followed negative investors’ reactions to the delayed results and the huge losses by the oil and gas company.
“Should the Exchange’s continuing review reveal that Oando committed other infractions, the Exchange will mete out appropriate sanctions pursuant to its rules,” the NSE stated.
The Exchange explained that it started the review because of the delayed filings and the significant losses which were posted for the 2014 fiscal year and the first three quarters of 2015.

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The management of Oando had already made representations to the NSE and the investing public explaining the reasons for the delay and the impairments that resulted in the losses during the reported periods.
In a letter addressed to the chief executive of the NSE, the group chief executive of Oando, Mr. Adewale Tinubu explained that the impairments were in line with reductions in the fair value of assets of oil and gas companies by global upstream players due to the steep decline in crude oil price.
According to him, Oando had to accept non-cash impairments and currency devaluation charges totaling N185.3 billion, N130.2 billion in its exploration and production business as a result of lower oil prices leading to a reduced valuation of certain exploration and appraisal assets and under-lift receivables owed to the company by NNPC, N36.4 billion in its energy services business due to reduced drilling activity and reduced day rates accruable to its rig assets and N18.7 billion due to the devaluation of the Naira, which generated a significant foreign exchange loss.
“While we have impaired certain exploration and near-production assets, mainly legacy assets, our core producing assets have not been impaired in any shape or form. The upstream company has generated in excess of $500 million in cash flows, which has been used as part of our aggressive deleveraging strategy to pay over $400 million of debt in the last 12-14 months. As we gradually exit our investment phase, we remain committed to shoring up our balance sheet, significantly reducing our interest burden, returning the company to profitability and take this opportunity to reaffirm our long-term business viability,” Tinubu said.

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Ripples Nigeria

We are an online newspaper, very passionate about Nigerian politics, business and their leaders. We dig deeper, without borders and without fears.
www.ripplesnigeria.com

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