Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the...
Transcript of Oando Plc H1 2012 Performance Revie · Oando PLC 6 H1, 2012 Operating Environment •Passage of the...
Oando PLC 1
Oando Plc H1 2012
Performance Review
www.oandoplc.com
Oando PLC 2
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.
Disclaimer
Oando PLC 3
ne
Contents
I
H1, 2012 Operating Environment
II Company Overview
III H1, 2012 Operational Highlights
IV H1, 2012 Financial Highlights
V Q & A
VI Strategic Overview
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H1, 2012 Operating Environment
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H1, 2012 Operating Environment
7.69% 7.72% 7.40%
7.68%
6.20%
6%
7%
7%
8%
8%
9%
9%
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012
• 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 2011. Source: Renaissance Capital Research; Central Bank of Nigeria (CBN)
Weaker GDP growth (%)
0
20
40
60
80
100
120
140
2.1
2.2
2.3
2.4
2.5
January February March April
Domestic Production Crude Price
Oil Production Volumes and High Crude Oil Prices
mbpd $/barrel
9
9.5
10
10.5
11
11.5
12
12.5
13
0
2
4
6
8
10
12
14
January February March April May June
MPR Inflation
Inflation & MPR (%)
Commentary
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H1, 2012 Operating Environment
• 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.
• 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, 2012.
• Privatization of the Power holding Company of Nigeria’s generation and distribution assets.
• Increase in Multi Year Tariff Order (MYTO)
• 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.
Gas Infrastructure
Power Sector Roadmap
Deregulation/ Subsidy
Petroleum Industry Bill (PIB)
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Company Overview
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Company overview
Exploration & Production
Energy Services
Gas & Power
Supply & Trading
Marketing
Desc
rip
tio
n
Ke
y
Asse
ts
Ma
rke
t P
osit
ion
• Largest swamp drilling fleet in Nigeria
• Rapidly expanding business line
• Primary assets are located in Nigeria
• 4 swamp rigs: 3 Working Assets and 1 under refurbishment.
• Drill bits and engineering services
• Total fluids management.
• 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
#1 A leading indigenous player
• First private sector company to enter gas distribution in Nigeria
• Consists of:
• GNL
• APL
• EHGC
• CHGC
• 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
#1
• Nigeria’s leading retailer of refined petroleum products with 13% market share in 2011.
• Large distribution footprint with access to over 1,500 trucks and 150m litres storage capacity.
• 500+ 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
• Trading desks and operations in Nigeria and Bermuda.
• Trading consultants in the UK and Singapore.
• Largest indigenous supply and trading player in the sub-Saharan region.
• 12% market share in PMS importation in 2011.
#1 #1
Oando is the leading indigenous oil and gas player in Nigeria
Upstream Division Midstream Division Downstream Division
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H1, 2012 Operational Highlights
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H1, 2012 Operational Update
Exploration & Production
Energy Services
Gas & Power
Supply & Trading
Marketing
H1
20
12 U
pd
ate
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.
Well successfully drilled on Ob-Ob OML 56, production testing in process. Increased production expected this year.
Akepo Field development is 70% complete, technical oil expected this year.
Signed a farm-in agreement for 40% participation interest in Qua Ibo (OML 13)
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 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.
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.
Upstream Division Midstream Division Downstream Division
• 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.
Guaranteed Revenue Drivers for FYE 2012
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Explanation of Subsidy Programme
The difference between the higher cost of imported PMS as ascertained by PPPRA and the ex-depot price is the subsidy that is repaid to importers after being subjected to an audit by Government appointed auditors. For example, the total cost of PMS imported product is as detailed below as at 6 Dec 2011 and 2 July 2012 respectively:
This Claim is neither profit, nor is it a benefit of PSF, It is a recovery of verified cost already incurred in the supply of PMS to consumers.
Total Cost of Imported PMS (A) N141.38
Ex-Depot Price (B) N55.90
Subsidy Claim (A-B) N85.48
N130.79
N87.66
N43.13
Pump Price N65.00 N97.00
Beneficiaries of the Subsidy on PMS
ANY MEMBER OF THE PUBLIC WHO BOUGHT PETROL OR USED PETROL BOUGHT AT N65 PER LITRE (NOW N97 PER LITRE BENEFITED FROM THE PSF AND WAS A BENEFICIARY OF SUBSIDY. Oando participated in the Subsidy Fund as claimants who were entitled to reimbursement of costs incurred in the importation and delivery of petrol into Nigeria. Claiming subsidy under the PSF for reimbursement is neither an unwholesome act nor is it illegal.
Description PMS ( N/LITRE )
6 Dec 2011 2 July 2012
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H1, 2012 Financial Highlights
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H1, 2012 Profit & Loss Highlights
31%
-4%
-10%
NGN’ Million H1 2012 H1 2011 Variance
Turnover 350,609 267,812 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) 2.90 3.01 (4%)
Turnover of N350.6 Billion
EBITDA of N18.9 Billion
Profit after Tax of N6.6 Billion
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Group Balance Sheet Highlights
15%
-7%
48%
EBITDA of
NGN’ Million H1 2012 H1 2011 Variance
Fixed Assets 183,752 159,508 15%
Non-current receivables 33,253 29,083 14%
Stock 42,671 30,745 39%
Trade and other Debtors 172,254 116,012 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
LT Borrowing of N88.9M
Trade & Other Debtors of N172.3M
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Group Debt Breakdown
Short Term,
N132Bn
Long Term, N89Bn OEPL,
N71Bn
OES, N60Bn
OGP, N22Bn
OST, N66Bn
GRP, N2Bn
Total Debt N221Bn Applied Divisional Debt Divisional Debt OEPL, N12Bn OES,
N9Bn
OGP, N24Bn
OST, N66Bn
OMP, N42Bn
GRP, N68Bn
As at 29 June, 2012
Exploration & Production
Energy Services
Gas & Power
Supply & Trading
Marketing
Use
of
Fu
nd
s
Rig Acquisition
Rig refurbishment
Drill Bits
Asset Acquisition
Signature Bonuses
Farm-in Fees
Asset Development
EHGC Pipeline
CNG project
Gaslink customer connects
Import Finance facilities and CPs for white product importation
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Divisional Performance Analysis
NGN Million Marketing
Supply & Trading
Gas & Power
Energy Services
Exploration & Production
Revenue 123,049 251,199 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 1,880 214 2,705
Profit after Tax (PAT) 1,246 2,053 1,368 146 366
Net Profit Margin 1.0% 0.7% 14.7% 1.6% 3.1%
-42% 87%
74%
-72%
-86%
OMPLC OST OGP OES OEPL
H1 2011
H1 2012
Gro
ss P
rofi
t P
AT
An
aly
sis
Total Group figures do not equal sum of individual entities due to intercompany adjustments (sales, interest, etc) and
corporate center activities.
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Divisional Performance Analysis Tu
rno
ve
r – N
35
0.6
Bill
ion
OEPL 3%
OES 2% OGP
2%
OST 62%
OMP 31%
OEPL 36%
OES 22%
OGP 15%
OST 11%
OMP 16%
OEPL 25%
OES 20%
OGP 8%
OST 15%
OMP 32%
OEPL 7%
OES 3%
OGP 26%
OST 40%
OMP 24%
EB
ITD
A –
N1
8.9
Bill
ion
G
ross M
arg
in –
N3
3.9
Billio
n
PA
T –
N6
.6 B
illion
Total Group figures do not equal sum of individual entities due to intercompany adjustments (sales, interest, etc) and
corporate center activities.
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Exploration & Production
NGN Million H1 2012 H1 2011 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% -
Sector Performance - Upstream
Energy Services
NGN Million H1 2012 H1 2011 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) 214 818 (74%)
Profit after Tax (PAT)/Net Profit 146 519 (72%)
Net Profit Margin 1.6% 7.1% -
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Gas & Power
Sector Performance - Midstream
NGN Million H1 2012 H1 2011 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 1,368 786 74%
Net Profit Margin 14.7% 10.2% -
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Supply & Trading
Sector Performance - Downstream
NGN Million H1 2012 H1 2011 Variance
Revenue 251,199 157,594 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% -
Oando Marketing
NGN Million H1 2012 H1 2011 Variance
Revenue 123,049 100,041 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% -
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Strategic Overview
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Transformation from a downstream giant to a full value chain indigenous champion across West Africa
Strategic Overview C
urr
en
t
•Fully refurbish and deploy 4th rig into operation.
•Enhance Production from assets (5kbopd to 10kbopd
•Accelerate near term acquisition opportunities
(50mmbbls)
• 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
Exploration & Production
Energy Services
Gas & Power
Supply & Trading
Marketing Terminals
•Development of the Marina Jetty and subsea pipelines in the Lagos Port
Mid
Te
rm
•Leverage local content policy opportunities
•Expand product offering (MWD, etc)
• Harness preferential resource access to dormant acreage due to indigenous status
• Production 20-50kbopd
• Reserves 2P: 100 – 150 mmbbls
• 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
Lo
ng
Te
rm •Consolidation of
position as market leader and expansion into other countries
• Production 50-100kbopd
• Reserves 2P: 300mmbbls
Through a mixture of organic growth and acquisitions
•Commence construction of 1st 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
Upstream Division Midstream Division Downstream Division
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www.oandoplc.com
Q & A