Oando Shareholders Pass 100% Vote of Confidence on Board, Management

From Left: Omamofe Boyo, Deputy Group Chief Executive, Oando PLC; Ayotola Jagun, Chief Compliance Officer and Company Secretary, Oando PLC; HRM Oba Michael A. Gbadebo, Chairman Board of Directors, Oando PLC; Wale Tinubu, Group Chief Executive, Oando PLC at Oando PLC’s successfully concluded 40th Annual General Meeting in Uyo, Awka-Ibom

—–Share Price Increase 3.69%

September 11, 2017

By Kingsley Ogunwa InvestAdvocate

Lagos (INVESTADVOCATE)-Shareholders of oil marketing major, Oando Plc on Monday in Uyo, Akwa Ibom State reported a successful 40th Annual General Meeting (AGM) as they passed a 100 percent vote of confidence on Wale Tinubu, group chief executive officer (GCEO) and the entire board of the company.

In their comments, the shareholders, who unanimously adopted the company’s 2016 audited report, raised concerns regarding the operations of the company, current challenges, the petition issue as well as its finances and debt profile.

His Royal Highness Oba Michael A. Gbadebo said the oil marketing firm was undergoing restructuring resulting from the prevailing global crisis in the oil and gas sector.

According to Oba Gbadebo, despite the challenges, Oando was on course towards becoming Africa’s most respected oil and gas company.“As we pursue our vision to be the most respected African oil and Gas Company, we are experiencing a period of restructuring for sustained growth.  We will continue on our aggressive reduction of debt to create a platform for long term profitability while driving growth via our dollar denominated upstream and downstream trading businesses. Cost reduction will remain key to us and we will ensure disciplined execution of our corporate initiatives towards achieving long term profitability and guaranteed returns for all shareholders,” he said.

On the shareholders concerns, Adeleke Oladimeji, a shareholder of Oando expressed concern on how media reports are gradually eroding shareholders’ investment in the company. He explained that the media were sub-consciously doing more damage than good to the investment of many Nigerians by reporting news without verification from parties involved.

This is coming on the heels of recent petitions against the company by two petitioners, Dahiru Mangal and Ansbury Inc alleging gross abuse of corporate governance and financial mismanagement.  They had requested the Securities and Exchange Commission (SEC) to postpone the AGM pending the close of investigations. However, SEC gave its nod for the AGM to go ahead as planned as there was no material evidence to warrant a postponement, further reiterating the company’s position that the petitions lacked merit.

Another shareholder,  Bisi Bakare, advised the concerned parties to resolve their disputes with the company in private to avoid unnecessary sensationalism which would in turn result in loss of money for the company and shareholders.

They further commended the management for delivering on their promise to return the Africa’s leading indigenous energy company to profitability by the end of 2016 and continuing with this positive trend in 2017. ‘’We request that you protect our interests, we believe in your leadership and ability as we await good returns on our investment, Bakare added.’’

Tinubu who responded to all the concerns got a resounding applause and chants of ‘’Progress, progress’’ by the hundreds of shareholders who attended the AGM.

He thanked the shareholders for their continued support of the company in the challenging times and assured them that the management team will focus on sustaining the company’s profitability and ensuring returns to shareholders.

“As your management team we assure you that our main focus will continue to be geared towards sustaining your company’s profitability and ensuring adequate return for you our esteemed shareholders. Our story has always been one of resilience, innovation and growth, and I assure you that we are fully committed towards positioning your Company towards sustained growth moving forward,” Tinubu said.

On the company’s debt profile, the Oando Group CEO noted that its facilities with banks had been restructured to medium term, with the plan to pay the interest in the first few years and principal in the later years.

“Let me bring to your attention that the $900 million debt position we had in 2014 following the acquisition of ConocoPhilips has been substantially reduced by over $600 million in just less than three years.  Our current dollar liability stands at around $300 million,” he added.

Speaking on the petitions he said; “As a reputable company, our approach is not to respond to every allegation in the media, allegations need to be delivered to the company in a particular format before we can respond. The petitioners requested a postponement of our AGM, but we provided the SEC with all the information required and we were cleared to hold the AGM.’’

“We reacted to the 2014 fall in oil price by providing a detailed restructuring plan which saw us reduce our overall debt by over 40 percent. Following the completion of our strategic deleveraging initiatives, we have evolved into a leaner but more focused organization with two core dollar earning entities,” he affirmed.

Oando late last year completed a $115.8 Million Gas and Power Partial Divestment to Helios Investment Partners, this analyst had reported would be an added positive in the medium term as revenue of the dual listed leading Africa’s  indigenous energy company is expected to grow.

Crude oil prices was hit hard last Friday and moved up on Monday as investors react to the news of talks between Saudi oil minister with his Venezuelan and Kazakh counterparts on Sunday regarding the possible extension to cut global oil supplies beyond March 2018.

Despite speculations of major disruptions at the AGM; nothing of the sort occurred.  The AGM went smoothly without disruption, more importantly it was successfully concluded.

However, there was a 15 minute protest outside the venue which was suspected to have been carried out by persons who are hoodlums as genuine shareholders were expected to enter the AGM hall to air their concerns and grievances.

The protesting crowd dispersed after key shareholder representatives advised that if they had legitimate concerns that they officially write to the management of the company expressing their concerns.

The company had reported that profit after tax (PAT) for the year ended December 31, 2016 increased 107 percent to N3.5 billion compared to a loss of N47.6 billion posted a year earlier.

Turnover increased by 49 percent to N569.0 billion compared to N382.0 billion recorded in the corresponding period of 2017.

In the first quarter of 2017, Oando posted N1.7 billion PAT a profit which came on the heels of growth in turnover by 11 percent to N138.4 billion and gross profit by 53 percent to N13.4 billion compared to the first quarter of 2016.

According to the Africa’s leading indigenous energy group listed on both the Nigerian and Johannesburg Stock Exchanges, half year 2017 gross profit increased by 76 percent  to N33.4 billion compared to N19 billion posted in the same  period of 2016; while turnover increased by 26 percent to N267.1 billion from N212.3 billion in 2016.

Similarly, PAT soared 117 percent to N4.6 billion for the half year period ended June 30, 2017 compared to a loss of N26.9 billion in the corresponding period of 2016.

Shares of the company at the close of the Monday’s trading on the Nigerian Stock Exchange (NSE) appreciated 3.69 percent to N6.75 from N6.51 traded the previous session; gaining 0.24 Kobo per share.

opan



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