Oando PLC YTD September, 2012 Performance …...12 NGN’ Million YTD Sept 2012 YTD Sept 2011...

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Oando PLC

YTD September, 2012

Performance Review

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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

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ne

Contents

• Operating Environment

• Company Overview

• Operational Highlights

• Corporate Actions

• Financial Highlights

• Strategic Overview

• Q & A

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Operating Environment

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6.17% 6.28%

6.85% 7.07%

Q1 2012 Q2 2012 Q3 2012(Forecast)

Q4 2012(Forecast)

GDP Growth (%)

99.51010.51111.51212.513

0

2

4

6

8

10

12

14

MPR Inflation

Inflation & MPR (%)

Source: Central Bank of Nigeria (CBN)

0

20

40

60

80

100

120

140

2.1

2.2

2.3

2.4

2.5Domestic Production Crude Price

Oil Production Volumes and Crude Oil Prices

mbpd $/barrel • GDP Growth this year is attributable to performance of the non-oil sector, predominantly driven by growth in activities in the building and construction sector; the oil sector experienced decreased output following rising crude theft in the first half of the year.

• Crude oil price has been on an upward trend in recent months due to strong demand from emerging economies. Crude oil production in Nigeria is reported to have hit a high of 2.7million bbls/day in Q3 2012.

• Aggressive monetary policy initiatives by the CBN have paid dividends with a drop in inflation during the last 3 months.

Commentary

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• The PIB appears to be top priority for the FGN, however, its passage remains elusive.

• The latest draft of the Bill was approved by the President in August and is currently in Parliament for debate.

• Large subsidy payments remain outstanding from the FGN to major marketers, including Oando.

• A timeline towards implementation of full deregulation by the FGN remains unclear.

• Privatization of the Power holding Company of Nigeria’s generation and distribution assets remains the main topic of focus in the industry.

• 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.

• Oando has submitted an Expression of Interest to supply gas and carry out operations and maintenance to NIPPs.

• The HMPR has announced an asset bid round to hold in Q4, 2012.

Gas Infrastructure

Power Sector Roadmap

Deregulation/ Subsidy

Petroleum Industry Bill (PIB)


Upstream Bid Round

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Company Overview

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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.

• 94.6% ownership of OER

• 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, Block 26 & Rubai Licences

#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.

• 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.

#1 #1

Oando is the leading indigenous oil and gas player in Nigeria

Upstream Division Midstream Division Downstream Division

Company Overview

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Operational Highlights

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Energy Services

Gas & Power

Supply & Trading

Marketing

201

2 O

pera

tio

na

l U

pd

ate

Teamwork completed its first contract year in September with no reported incidents.

Average Operating efficiency of 3 rigs above 90%.

Fourth rig (Respect) expected to be delivered into contract with IOC by Q2, 2013.

OER publicly listed on the TSX.

Average Production of 4.6kbopd from 2 assets

Ebendo Field

EB-4 well production tested above 2,000bopd (855bopd net to OER).

The EB-5 well currently being drilled. Expected TD of 11,798ft.

•QUA-Iboe field

Well drilled

Well Test ongoing

Gas Network Services Ltd (CNG) expected to commence operations towards the end of Q1 2013. Government approvals for construction received.

EHGC Monthly Average Volume: 8.11mmscm.

Gaslink Volume increase: 8.43mmscm.

Akute: Currently negotiating an improved Operations & Maintenance contract with a customer.

Reduced sales volumes were as a result of NLC strikes and late release of Q1 PMS allocation.

Repositioning and upgrade of storage and distribution facilities.

LPG strategy still ongoing with delivery of 440k cylinders. 60k cylinders sold.

Commenced construction of midstream jetty, capacity to increase import volumes.

Largest importer of PMS in Q3, await subsidy payments on imports.

Increased crude trades from African countries.

Focusing on other markets and products to build business.


2012 Operational Update

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Financial Highlights

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NGN’ Million

YTD Sept 2012

YTD Sept 2011

Variance

Turnover 487,770 392,304 24%

Gross Margin 50,660 49,086 3%

Non-interest Expenses (28,073) (27,832) 1%

Other Operating Income 4,885 7,333 (33%)

EBITDA 32,025 28,587 12%

Net Finance Costs (7,631) (4,777) 60%

Depreciation and Amortization (6,987) (5,656) (24%)

Profit before Tax (PBT) 17,408 18,155 (4%)

Profit after Tax (PAT)/Net Profit 9,272 8,773 6%

Gross Margin Percentage 10.4% 12.5% -

EPS (based on 2,274Mn Shares) 4.08 3.86 -

24%

6%

12%

Turnover of N487.8 Billion

EBITDA of N32.0Billion

Profit after Tax of N9.3 Billion

Profit & Loss Highlights

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Quarterly Financial Breakdown

NGN’ Million

Q3

Q2

Q1

Turnover 137,161 192,004

158,605

Gross Margin 16,672 18,927

15,061

Non-interest Expenses (10,061) (8,266)

(9,746)

Other Operating Income 1,989 1,591

1,305

EBITDA 13,151 8,881

9,993

Net Finance Costs (3,677) (1,099)

(2,855)

Depreciation and Amortization (2,483) (2,353)

(2,151)

Profit before Tax (PBT) 6,992 5,429

4,987

Profit after Tax (PAT)/Net Profit 2,666 3,580

3,026

Turnover of N487.8 Billion

Q1 33%

Q2 39%

Q3 28%

Contribution

Q1 33%

Q2 38%

Q3 29%

Q1 31%

Q2 28%

Q3 41%

EBITDA of N32.0Billion

Profit after Tax of N9.3 Billion

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Group Balance Sheet Highlights

6%

12%

72%

EBITDA of

NGN’ Million

YTD Sept 2012

YTD Sept 2011

Variance

Fixed Assets 185,185

175,455 6%

Non-current receivables 34,170

34,426 (1%)

Stock 21,601

32,458 (33%)

Trade and other Debtors 182,204

106,220 72%

Bank and cash balances 34,130 21,034 62%

Trade and other Creditors 101,606

74,017 37%

Short Term Borrowings 163,114

119,993 36%

Long Term Borrowings 95,853

85,592 12%

Equity & Reserves 98,092 91,262 7%

Fixed Assets of N185.2Bn

LT Borrowing of N95.9M

Trade & Other Debtors of N182.2M

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Short Term,

N163BN

Long Term,

N96BN E&P, N72BN

OES, N55BN

OGP, N21BN

OST, N106BN

GRP, N5BN

Total Debt N259 Billion Uses Sources

E&P, N16BN OES,

N8BN OGP,

N23BN

OST, N106BN

OMP, N40BN

GRP, N66BN

As at 28 Sept, 2012


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

Group Debt Breakdown

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Divisional Performance Analysis

NGN Million Marketing

Supply & Trading

Gas & Power

Energy Services


Turnover 183,781 343,525 14,192 14,252 17,996

Gross Margin 18,291 8,275 3,690 9,940 12,212

EBITDA 7,375 4,333 2,829 6,639 11,370

Profit before Tax (PBT) 4,197 4,346 3,139 (605) 3,370

Profit after Tax (PAT) 2,860 3,506 2,333 (411) (1,750)

Net Profit Margin 1.6% 1.0% 16.4% (2.9%) (9.7%)

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.

-5% 80% 25%

-954%

-152%

OMPLC OST OGP OES E & P

YTD Sept 2011

YTD Sept 2012

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Divisional Performance Analysis Tu

rno

ve

r – N

48

7.8

Bill

ion

E & P 3%

OES 3% OGP

2%

OST 60%

OMP 32%

E & P 35%

OES 20%

OGP 9%

OST 13%

OMP 23%

E & P 23%

OES 19%

OGP 7%

OST 16%

OMP 35%

OGP 36%

OST 54%

OMP 44%

EB

ITD

A –

N3

2.0

Bill

ion

G

ross M

arg

in –

N5

0.7

Billio

n

PA

T –

N9

.3 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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Energy Services


NGN Million

YTD Sept 2012

YTD Sept 2011

Variance

Turnover 17,996 21,286 (15%)

Gross Margin 12,212 16,432 (26%)

EBITDA 11,370 16,009 (29%)

EBITDA Margin 63.2% 75.2% -

Profit before tax (PBT) 3,370 9,854 (66%)

Loss after tax (1,750) 3,373 (152%)

Net Loss Margin (9.7%) 15.8% -

Sector Performance - Upstream

NGN Million

YTD Sept 2012

YTD Sept 2011

Variance

Turnover 14,252 10,287 39%

Gross Margin 9,940 7,978 25%

EBITDA 6,639 4,817 38%


Loss before tax (605) (57) (961%)

Loss after tax (411) (39) (954%)

Net Loss Margin (2.9%) (0.4%) -

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Gas & Power

Sector Performance - Midstream

NGN Million

YTD Sept 2012

YTD Sept 2011

Variance

Turnover 14,192 11,088 28%

Gross Margin 3,690 3,384 9%

EBITDA 2,829 4,014 (30%)


Profit before tax (PBT) 3,139 2,676 17%

Profit after tax (PAT) 2,333 1,865 25%

Net Profit Margin 16.4% 16.8% -

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Supply & Trading

Sector Performance - Downstream

NGN Million

YTD Sept 2012

YTD Sept 2011

Variance

Turnover 343,525 256,064 34%

Gross Margin 8,275 5,815 42%

EBITDA 4,333 2,435 78%


Profit before tax (PBT) 4,346 2,236 94%

Profit after tax (PAT) 3,506 1,952 80%


Oando Marketing

NGN Million

YTD Sept 2012

YTD Sept 2011

Variance

Turnover

183,781 137,573 34%

Gross Margin

18,291 16,242 13%

EBITDA 7,375 6,286 17%


Profit before tax (PBT) 4,197 4,403 (5%)

Profit after tax (PAT)

2,860 2,999 (5%)


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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

Cu

rre

nt

•Fully refurbish and deploy 4th rig into operation

•Divestment of upto 50%

• Enhance Production from assets (5kbbls/day to 10kbbls/day

• 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


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

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 African presence

•Expand white product storage facilities in Nigeria


Strategic Overview

• Expansion into high margin volumes, Lubes & LPG distribution

• Business Combination with Global Commodity Trader

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Q & A

Oando PLC YTD September, 2012 Performance …...12 NGN’ Million YTD Sept 2012 YTD Sept 2011...

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