Oando Plc H Performance Review

Transcription

1 Oando Plc H Performance Review 1

2 Disclaimer This presentation does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any Oando Plc (the Company ) shares or other securities. This presentation includes certain forward looking statements with respect to certain development projects, potential collaborative partnerships, results of operations and certain plans and objectives of the Company including, in particular and without limitation, the statements regarding potential sales revenues from projects, both current and under development, possible launch dates for new projects, and any revenue and profit guidance. By their very nature forward looking statements involve risk and uncertainty that could cause actual results and developments to differ materially from those expressed or implied. The significant risks related to the Company s business which could cause the Company s actual results and developments to differ materially from those forward looking statements are discussed in the Company s annual report and other filings. All forward looking statements in this presentation are based on information known to the Company on the date hereof. The Company will not publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser. 2

3 Contents ne I H1, 2012 Operating Environment II Company Overview III H1, 2012 Operational Highlights IV H1, 2012 Financial Highlights V VI Strategic Overview Q & A 3

4 H1, 2012 Operating Environment 4

5 H1, 2012 Operating Environment 9% 9% 8% 8% 7% 7% 6% Weaker GDP growth (%) 7.69% 7.72% 7.68% 7.40% 6.20% Q Q Q Q Q Oil Production Volumes and High Crude Oil Prices mbpd $/barrel Domestic Production Crude Price January February March April Source: Renaissance Capital Research; Central Bank of Nigeria (CBN) Inflation & MPR (%) MPR Inflation January February March April May June Commentary GDP growth is estimated at 6.2% as at Q1 2012, from 7.1% a year earlier. The January 2012 petrol price hike of about 50% is believed to have played a major role in slowing down growth in the economy. Crude oil production declined from a high of 2.40mbopd in February to 2.29mbopd in April. Crude oil price also declined significantly from $113.81/barrel in January to $98.06/barrel in April, following the global economic downturn. Inflation rose to 12.9% by June 2012 from 12.6% in January following the petrol price hike. MPR has remained at 12% since October

6 H1, 2012 Operating Environment Petroleum Industry Bill (PIB) Passage of the PIB now appears to be top priority for the government and there is hope that it will be passed this year. A draft of the Bill was recently sent from the President of the FGN to the National Assembly for review and debate. Deregulation/ Subsidy The start of the year witnessed the partial removal of petrol subsidy, which will reduce the burden on the PSF. FGN still contemplating deregulation this year. FGN currently verifying subsidy payments to all Oil marketers for the period of H1, Power Sector Roadmap Privatization of the Power holding Company of Nigeria s generation and distribution assets. Increase in Multi Year Tariff Order (MYTO). Gas Infrastructure Declaration of a gas emergency for the fast track implementation/construction of gas infrastructure to the stranded Independent Power Plants for an immediate increase in daily power generation. 6

7 Company Overview 7

8 Company overview Oando is the leading indigenous oil and gas player in Nigeria Upstream Division Midstream Division Downstream Division Exploration & Production Energy Services Gas & Power Supply & Trading Marketing Market Position A leading indigenous player #1 #1 #1 #1 Description Rapidly expanding business line Primary assets are located in Nigeria Largest swamp drilling fleet in Nigeria First private sector company to enter gas distribution in Nigeria Consists of: GNL APL EHGC CHGC Largest indigenous supply and trading player in the sub-saharan region. 12% market share in PMS importation. Nigeria s leading retailer of refined petroleum products with 13% market share. Large distribution footprint with access to over 1,500 trucks and 150m litres storage capacity. Key Assets Producing assets: OML 125 & OML 56. Development & appraisal: OML 134, OML 90, OML 13 & OPL 236. Exploration: OPL 278, OPL 282, OPL 321, OPL 323, OML122 & JDZ 4 swamp rigs: 3 Working Assets and 1 under refurbishment. Drill bits and engineering services Total fluids management. 100 km gas distribution pipeline in Lagos. 128 km gas pipeline in the East of Nigeria spanning Akwa Ibom and Cross River states. Akute captive Power Plant Riv Gas. Central Processing Facility Trading desks and operations in Nigeria and Bermuda. Trading consultants in the UK and Singapore retail outlets in Nigeria, Ghana and Togo 8 terminals (159.5ML) 3 Aviation fuel depots 2 lube blending plants (55m litres / annum) 7 LPG filling plants 8

9 H1, 2012 Operational Highlights 9

10 H1, 2012 Operational Update Upstream Division Midstream Division Downstream Division Exploration & Production Energy Services Gas & Power Supply & Trading Marketing H Update Well successfully drilled on Ob-Ob OML 56, production testing in process. Increased production expected this year. Akepo Field OML 90, development is 70% complete, technical oil expected this year. Signed a farm-in agreement for 40% participation interest in Qua Ibo (OML 13) Third rig, Passion, has commenced operations for Shell Fourth rig, Respect, has arrived in the United States to commence refurbishment Teamwork and Integrity have 95% uptime rate. EHGC: commenced supply of gas to anchor customer, UNICEM. Excess capacity to be contracted by Q4, 2012 to the FGN. Gaslink pipeline and Akute Power continue to generate revenue for the Group. Deregulation of PMS effective Jan 1, 2012, leading to price hike and strikes: crippling importation of all products. Outcome: New PMS price of N97 per litre. Importation regularized by end Q1. OST has 12% market share in private PMS importation and is largest white product importer into WAF. Deregulation of PMS led to industry strikes, resulting in reduced sales volumes across country. Repositioning and upgrade of storage and distribution facilities LPG strategy on track with delivery of 343k cylinders. Guaranteed Revenue Drivers for FYE 2012 Third rig, OES Passion, has now been deployed and has commenced operations with an IOC. EHGC has commenced the supply of gas to its anchor customer, UNICEM, with other opportunities also being explored. Production increase from assets under development. 10

11 H1, 2012 Financial Highlights 11

12 H1, 2012 Profit & Loss Highlights NGN Million H H Variance Turnover 350, ,812 31% 31% Gross Margin 33,988 31,518 8% Non-interest Expenses (18,012) (16,370) 10% Other Operating Income 2,896 3,996 (27%) EBITDA 18,874 20,868 (10%) Interest Expenses (3,954) (3,794) 4% Depreciation and Amortization (4,504) (4,088) 10% Profit before Tax (PBT) 10,416 12,977 (20%) Profit after Tax (PAT)/Net Profit 6,606 6,856 (4%) Gross Margin Percentage 9% 12% (25%) EPS (based on 2,274Mn Shares) (4%) Turnover of N350.6 Billion -10% EBITDA of N18.9 Billion -4% Profit after Tax of N6.6 Billion 12

13 Group Balance Sheet Highlights NGN Million H H Variance Fixed Assets 183, ,508 15% 15% Non-current receivables 33,253 29,083 14% Stock 42,671 30,745 39% Trade and other Debtors 172, ,012 48% Bank and cash balances 13,820 16,686 (17%) Trade and other Creditors 130,190 92,746 41% Short Term Borrowings 132,391 69,493 91% Long Borrowings 88,897 95,230 (7%) Equity & Reserves 94,824 99,871 (1%) Fixed Assets of N183.8Bn 48% Trade & Other Debtors of N172.3M -7% LT EBITDA Borrowing of of N88.9M 13

14 Divisional Performance Analysis NGN Million Marketing Supply & Trading Gas & Power Energy Services Exploration & Production Revenue 123, ,199 9,332 9,151 11,714 Gross Margin 10,073 4,872 2,445 6,252 7,822 EBITDA 3,217 2,226 3,052 4,324 7,209 Profit before Tax (PBT) 1,826 2,213 1, ,705 Profit after Tax (PAT) 1,246 2,053 1, Net Profit Margin 1.0% 0.7% 14.7% 1.6% 3.1% -42% 87% -86% Gross PAT Analysis Profit H H % -72% OMPLC OST OGP OES OEPL Total Group figures do not equal sum of individual entities due to intercompany adjustments (sales, interest, etc) and corporate center activities. 14

15 Divisional Performance Analysis Turnover N350.6 Billion EBITDA N18.9 Billion OMP 31% OST 11% OGP 15% OMP 16% OEPL 3% OES 22% OES 2% OGP 2% OST 62% OEPL 36% OMP 32% OST 15% OMP 24% OST 40% OGP 8% OEPL 7% OEPL 25% OES 20% OES 3% OGP 26% Gross Margin N33.9 Billion PAT N6.6 Billion Total Group figures do not equal sum of individual entities due to intercompany adjustments (sales, interest, etc) and corporate center activities. 15

16 Sector Performance - Upstream Exploration & Production Energy Services NGN Million H H Variance Revenue 11,714 15,263 (23%) Gross Margin 7,822 11,512 (32%) EBITDA 7,209 10,244 (30%) EBITDA Margin 61.5% 67.1% - Profit before Tax (PBT) 2,705 7,017 (61%) Profit after Tax (PAT)/Net Profit 366 2,659 (86%) Net Profit Margin 3.1% 17.4% - NGN Million H H Variance Revenue 9,151 7,275 26% Gross Margin 6,252 6,062 3% EBITDA 4,324 4,107 5% EBITDA Margin 47.3% 56.5% - Profit before Tax (PBT) (74%) Profit after Tax (PAT)/Net Profit (72%) Net Profit Margin 1.6% 7.1% - 16

17 Sector Performance - Midstream Gas & Power NGN Million H H Variance Revenue 9,332 7,738 21% Gross Margin 2,445 2,343 4% EBITDA 3,052 2,026 51% EBITDA Margin 32.7% 26.2% - Profit before Tax (PBT) 1,880 1,123 67% Profit after Tax (PAT)/Net Profit 1, % Net Profit Margin 14.7% 10.2% - 17

18 Sector Performance - Downstream Supply & Trading Oando Marketing NGN Million H H Variance Revenue 251, ,594 59% Gross Margin 4,872 2,728 79% EBITDA 2,226 1,232 81% EBITDA Margin 0.9% 0.8% - Profit before Tax (PBT) 2,213 1,128 96% Profit after Tax (PAT)/Net Profit 2,053 1,095 87% Net Profit Margin 0.8% 0.7% - NGN Million H H Variance Revenue 123, ,041 23% Gross Margin 10,073 10,716 (6%) EBITDA 3,217 5,092 (37%) EBITDA Margin 2.6% 5.1% - Profit before Tax (PBT) 1,826 3,123 (42%) Profit after Tax (PAT)/Net Profit 1,246 2,127 (42%) Net Profit Margin 1.0% 2.1% - 18

19 Strategic Overview 19

20 Strategic Overview Transformation from a downstream giant to a full value chain indigenous champion across West Africa Upstream Division Midstream Division Downstream Division Exploration & Production Energy Services Gas & Power Supply & Trading Marketing Terminals Current Enhance Production from assets (5kbopd to 10kbopd Accelerate near term acquisition opportunities (50mmbbls) Fully refurbish and deploy 4 th rig into operation. Complete construction: GL4 CNG CHGC Sell 90% of current franchise capacity Intensify white product supply by leveraging efficiencies Intensify new product offerings Increase distribution efficiency and expansion into high margin volumes, Lubes & LPG distribution Development of the Marina Jetty and subsea pipelines in the Lagos Port Mid Term Harness preferential resource access to dormant acreage due to indigenous status Production 20-50kbopd Reserves 2P: mmbbls Leverage local content policy opportunities Expand product offering (MWD, etc) Commence construction of: EIIJ pipeline franchise OBOB Substantially increase crude oil market share Increase white products market dominance by leveraging new import infrastructure. Divestment of up to 49% and listing on the NSE Development of a 210,000MT terminal facility in Lekki Free Trade Zone Long Term Production kbopd Reserves 2P: 300mmbbls Through a mixture of organic growth and acquisitions Consolidation of position as market leader and expansion into other countries Commence construction of 1 st CPF and 2 more gas pipeline franchise areas in Nigeria Increase geographical presence Expansion of business across the sub-saharan region Expand white product storage facilities in Nigeria 20

21 Q & A 21