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Oando, a leading Nigerian oil and gas company, has reported an after-tax loss of N26.9 billion for the 2016 half-year ended on June 30. The loss is 23 per cent lower than Oando’s N35 billion loss declared in a similar period of last year.

The company said its revenue, however, rose 18 per cent to N212 billion in H1’16,  compared with N180 billion in H1’15, according to a statement released at the Nigerian Stock Exchange on Monday.

“The first half of the year has attested to the deplorable state of security in the oil & gas environment in Nigeria, having experienced a 25% decline in production volumes arising from the increased disruptions from militant activities,” said Wale Tinubu, Oando’s Group CEO. “On a positive note the company has benefitted from the implementation of the oil price hedge, which has helped to calm the effects of the disruption of production activities and aided in the rapid pay down of the $900 million of upstream related liabilities at the time of the ConocoPhilips acquisition, to $440 million today.”

Last month, Oando issued a profit warning to investors because of an unrealized foreign exchange loss of N28.6 billion due to the impact of the naira devaluation on the company’s dollar-denominated debts worth about $261 million.
 
Oando said it has now converted $133 million worth of its debt to N38.6 billion, which will be serviced by its naira earnings. The company said the remaining part of its dollar-denominated debt will be serviced by its dollar earnings.

In June this year, 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.

Oando also raised $210 million from Helios Investment Partners and Vitriol Group to recapitalize its loss-making downstream operations, Oando Downstream.

“We have limited the risk of exchange rate volatility by converting a substantial portion of our dollar denominated obligations to naira, thereby matching our dollar liabilities to our dollar generating businesses,” Tinubu said.

“We reiterate our forward looking business model of a focused upstream and export trading businesses, which will drive profitability through consistent dollar earnings”

Oando said it expects to return to profitability by the end of this year. As at 1.49pm, the company’s stock fell 9.49 percent to N5.07 per share.