27 June 2013, Lagos – The board of Oando Plc has recom mended distribution of N5.1 billion as cash dividends for the year ended December 31, 2012, translating to an increase of 59 per cent over the N3.2 billion projected as cash payouts for the year in the recent forecasts of the integrated energy company.
The positive dividend recommendation followed impressive growths across key performance indicators in 2012 as the company rode on the back of increased cost efficiency to grow net profit by 527 per cent. Basic earnings per share leapt by 532 per cent from 75 kobo in 2011 to N4.74 in 2012, providing adequate ground for the current increase in payout and sustainable future payouts.
Key extracts of the audited report, prepared in line with the International Financial Reporting Standards, IFRS, showed that all indices surpassed earlier management estimates. Net profit stood at N10.79 billion in 2012 compared with N1.72 billion in 2011. The bottom-line performance underscored the courageous decision of the company to once and for all deal with nagging extraordinary item in the previous year.
The report showed that profit before tax rose from N12.97 billion to N17.55 billion. Gross profit lept from N65.83 billion to N81.62 billion. Turnover stood at N673.18 billion in 2012 as against N571.31 billion in 2011.
The earnings report justified the show of confidence by shareholders during the recent rights issue, which was oversubscribed. Oando had raised about N55.2 billion from the rights issue to existing shareholders, slightly above the initial target of N54.6 billion. The company had issued 4.548 billion ordinary shares of 50 kobo each to existing shareholders at N12 per share between December 2012 and February 2013 with the intention of raising N54.6 billion.
However, details of the allotment showed that a total of 11,714 acceptances for 4,596,055,622 ordinary shares, valued at N55.153 billion were received in connection with the rights issue. All 11,714 acceptances were found to be valid under the terms of the rights issue and were all processed, leading to a subscription of 101 levels.
In the forecasts to the rights issue, shareholders were expected to receive about N3.2 billion for the 2012 business year. Gross dividend is expected to more than double to N8.83 billion in 2013 and N17.83 billion in 2014. Shareholders are projected to receive about N17.06 billion in 2015.
Market analysts see Oando as a low cost route into Nigeria’s attractive energy sector, citing the company’s investments in the high margin upstream division that will transform the business significantly and increase value creation for the shareholders.
– The Nation