04 November 2015, Lagos – The Nigerian Stock Exchange (NSE) on Tuesday said it was reviewing the situation regarding the delayed filings of the Audited Financial Statements (AFS) of Oando Plc for the year ended December 31, 2014, its first quarter and half year delayed fillings.
Although the exchange said it had sanctioned Oando Plc for violations of its post-listing obligations in accordance with its applicable Rules, it has also invited the company’s AuditCommittee as well as its external auditors.
“Should Exchange’s continuing review reveal that Oando committed other infractions, the exchange will mete out appropriate sanctions pursuant to its Rules. The exchangehas reported the situation to the Securities and Exchange Commission. And, will involve other stakeholders, as appropriate,” the NSE said.
Oando Plc posted a loss of N184 billion for the 2014 financial year.
Speaking on the performance, the Group Chief Executive Officer of Oando, Mr. Wale Tinubu,said the company would bounce back to profitability by 2016.
“Upstream players have been forced to record significant reductions in the fair value of their asset portfolios. Oandois no exception to this global trend, which has led us torecognise about N76.9 billion of impairment charges in our exploration and production business. This impairment is as a result of lower oil prices leading to a reduced valuation of certain exploration and appraisal assets. We prudently booked an additional N16.9 billion write down on under-lift receivables and Production Sharing Contract receivables in our exploration and production business, and our energy services business realized impairments of N37.1 billion, as the current oil price environment has brought about reduced drilling activity and in turn reduced day rates accruable to our rig assets, as well as a weaker market outlook,” Tinubu said.
He explained that in addition to the decline in oil prices there was a 8.4 per cent devaluation of the Naira which generated a significant foreign exchange loss in our downstream business.
“The nature of the business makes us extremely vulnerable to foreign exchange risks as we import in dollar denomination and recover our costs in Naira. The delay of payments of subsidies from the federal government has served to increase this vulnerability and led to arealisation of N7.3 billion in foreign exchange losses,” Tinubu stated.