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Oando, a leading Nigerian oil and gas company, warned investors on Monday to expect “materially lower earnings” for the second quarter of 2016 due to significant foreign exchange losses from the company’s foreign currency debts arising from the impact of the naira devaluation against the U.S. dollar.

According to a statement released at the Nigerian Stock Exchange (NSE), Oando said the naira devaluation caused the company to book unrealized foreign exchange losses from its dollar-denominated liabilities of about $261 million.  

“As at the time of the devaluation the company had dollar denominated borrowings of about $261 Million in our naira dominated earnings businesses, consisting of about $68 Million in core loans, $89 Million in bank trade facilities, about $83 Million in asset financing, and $21 Million in other payables,” Oando said.

Oando's unrealised foreign exchange losses caused by the naria devaluation is about N21.1 billion.

Last month, Oando struck a deal with 10 Nigerian banks to restructure the company’s loans worth up to N94.6 billion. The financing is a five-year term loan, with a 3-year moratorium on the principal, at the Nigerian interbank rate plus 2 percentage points.

The company has also raised $210 million from HV Investments to recapitalize its loss-making downstream operations, which has been hit hard by the slump in global oil prices.

“Despite the challenging operating landscape in 2016, we reiterate our focus of returning the Group to profitability by growing our dollar earning higher margin upstream and export trading businesses, which will not be impacted by the volatility of Foreign Exchange rates to the Naira,” Oando said. “We remain confident in our diversified business model and the long-term prospects for growth in Nigeria and beyond.”