Oando improves on 3rd quater results
March 24th, 2007 Ogbuotobo Chuks || chuks@stockmarketnigeria.com
By Ogbuotobo Chuks
The performance of Oando plc for the third quarter ended September 30 2006 shows marked improvements in earnings and dividends prospects. This is as the market awaits the full-year results expected to be released soon.
Turnover for the nine months period stood at N224 billion. The company had maintained steady growth in traded volumes from N52.8 billion in first quarter to a half-year figure of N151.6 billion. The third quarter 2006 turnover is high improvement compared to the 2005 full year turnover of N183 billion.
Profit after tax for the period closed at N2.3 billion, showing a difference of N800-million over a net profit of N1.5 billion achieved in the whole of 2005. A further breakdown revealed that in quarter one, after tax profit stood at N636 million, before it shot up to N1.2 billion in the second quarter.
Earnings per share per share stood at 405 kobo for the nine months period as against 262 kobo recorded in the whole of 2005. The indication is that the investors in the company are in for much better rewards for the 2006 financial year, as against the previous year when the investors received cash dividends of 250 kobo per share.
The expectation of the market is that full year profits may grow by 127 percent. Already, net profit has moved up to from 0.8 percent in the second quarter to 1.0 percent in the third quarter. The revenue growth of the company above the industry average, improvement in profit margins, and accelerating growth in profit are some of the factors fuelling the earnings and dividend expectations.
Oando is certainly leveraging the particularly vantage position of the petroleum sector in the economy. The nature of the products creates unique advantages for marketers to sell in all market situations. The industry is therefore significantly shielded from the weakening aggregate demand in the economy.
Product availability has also helped revenue performance in the sector. There have been fewer disruptions in product supplies and in the general economic activity over the past one year. Expansion of retail outlets has given the company a growing share of the market, thereby generally meeting its objective of improvement in profit margin. Sales revenue is growing and a significant proportion of it into profit.
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