Oando PLC’s Q3 2024 results reveal a company balancing on the edge of challenges and opportunities.
While grappling with a 5% production decline caused by sabotage and theft-related shut-ins, the company posted an impressive 36% growth in revenue to N3.2 trillion, signaling the effectiveness of its recent restructuring efforts and strategic pivots.
These numbers highlight a dual narrative for the Nigerian energy giant.
On the one hand, operational disruptions have hampered production, with average daily output dropping to 20,560 boe/day compared to 21,529 boe/day a year earlier.
On the other hand, the acquisition of the Nigerian Agip Oil Company (NAOC) has provided a lifeline, boosting Oando’s post-acquisition production by 40% to 30,675 boe/day.
Wale Tinubu, Group Chief Executive, described the NAOC deal as transformative, emphasizing its potential to enhance efficiency and operational scale.
This acquisition underpins Oando’s strategic focus on upstream assets, marking a decisive shift away from downstream operations where volatility has often dictated performance.
Despite operational headwinds, revenue growth reflects the company’s ability to capitalize on exchange rate gains and increased crude oil liftings. However, the story becomes more complex when examining profitability.
Oando’s trading segment remains a weak spot. Crude oil volumes fell by 47% year-on-year, while traded refined petroleum products plummeted by 56%.
Oando’s pivot to upstream operations appears well-timed. The NAOC acquisition not only adds immediate production capacity but also lays a foundation for sustainable growth.
Investors and stakeholders may still need patience, but the company’s trajectory signals that the light in the tunnel is real and steadily growing brighter.