Oando Plc has released its unaudited financial result for the first half of the year recording a pre-tax loss of N281.03 billion.
The company’s financial statement for the first six months of 2024 posted on the NGX revealed that revenues declined from N1.027 trillion in the first half of 2023 to N343.86 billion.
This represents a 67% dip in revenues year on year.
In the period under review, the company increased its losses from N134.54 billion in the first six months of 2023 billion to the current figure.
Key Highlights of the report include;
- Revenues- N343.86 billion, -67% YoY
- Cost of sales- N343.74 billion, -67%
- Gross Profit- N117.5 million, -91%
- Other operating income- N216.53 billion, -7%
- Administrative expenses- N437.24 billion, +30%
- Operating Loss- N257.17 billion, +109%
- Finance cost- N25.97 billion, +81%
- Net finance cost- N23.85 billion, +90%
- Loss Before tax- N281.03 billion, +107%
- Income tax expense- N1.73 billion, -66%
- Loss for the period- N282.77 billion, +101%
- Basic loss per share- (-N23), +109%
Commentary: The company experienced a challenging financial period, with revenues plummeting by 67% year-over-year to N343.86 billion, which aligns with a similar 67% drop in the cost of sales, suggesting a major contraction in sales activities.
Despite the cost reduction, the gross profit took a significant hit, dropping by 91% to N117.5 million, reflecting shrinking profit margins. While other operating income saw a relatively minor decrease of 7% to N216.53 billion, administrative expenses rose sharply by 30% to N437.24 billion, compounding the strain on the company’s profitability.
The company in the period recorded a foreign exchange gain of N280.29 billion- an increase from N258.38 billion in the same period of 2023.
The result was a substantial operating loss of N257.17 billion, a 109% increase, underscoring the pressure from rising costs amid declining revenue. The company’s finance costs also surged by 81% to N25.97 billion, leading to a net finance cost increase of 90%, further eroding financial stability.
This, coupled with the operating loss, led to a pre-tax loss of N281.03 billion, marking a 107% rise. Even with a 66% reduction in income tax expenses, the company reported a net loss of N282.77 billion, up by 101% year-over-year.
The impact on shareholders is stark, with a basic loss per share worsening by 109% to -N23, indicating considerable financial deterioration and increased investor burden.
Overall, the company is grappling with high costs, shrinking revenues, and escalating losses, posing significant operational and financial challenges.
