| Wed 16 May 2007, 14:30 | | OAO - Oando - Posting of Annual Report and Slight |
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OAO
UNTP
OAO - Oando - Posting of Annual Report and Slight Change Statement
Oando Plc
(Incorporated in Nigeria and registered as an external company in South Africa)
Registration number: RC 6474
(External company registration number: 2005/038824/10)
Share Code on the JSE Limited: OAO
Share Code on the Nigerian Stock Exchange: UNTP
ISIN: NG00000UNTP0
("Oando" or "the Company")
POSTING OF ANNUAL REPORT AND SLIGHT CHANGE STATEMENT
Highlights:
- Turnover of $1,648m
- Gross Profit of $140m
- Gross Profit Margin of 8.50%
- Operating Profit of $57m
- Profit After Tax of $22m
- Attributable Profit After Tax of $19.3m
- Earning Per Share: 3.37c
- Continued expansion and consolidation of efforts across the companies
within the Group
- Gaining competency, improved efficiency and seamless work processes
Introduction
Oando releases its annual report for the year ended 31 December 2006 on
Wednesday, 16 May 2007. The annual report contains slight modifications to the
provisional reviewed results published on 2 April 2007.
These changes are largely a reflection of post year-end events; subsequent
provisions recognised on some receivables and the reclassification of certain
items on the profit and loss statement and balance sheet of the Group. Specific
details are as follows:
Administrative Expenses
Administrative expenses reduced due to a reclassification of certain expenses as
part of cost of sales expenses.
Finance Cost/Interest Income Received
The change in finance cost is due to the reclassification of Interest income
received income to finance cost and an additional $1m finance cost reclassified
as part of cost of sales expenses.
Profit Before Taxation
The increase in Profit Before Taxation is a function of the following factors:
reversal of $1.54m tank decommissioning provision made in prior year; accretion
discount on provision of $0.2m and $4.9m net change in administrative, selling
and marketing expenses and operating profit brought about a $6.7m increase in
the Group PBT.
Income Tax Expense:
Income tax expense increased largely as a result of the re-computation of
assessable profit and recognition of under provision on deferred tax in prior
years as well as an additional deferred income tax charge of $8.2m.
Minority Interest
Minority interest reduced as a post year end sales provision was recognised on
some receivables from one of the subsidiaries subsequent to finalising the
account.
Long Term Investment
Long Term Investment increased due to the revaluation of the Group quoted
investment using the market price at the close of business on 31 December 2006.
Long Term Receivables
Long Term Receivables increased due to the reclassification of all leasehold
(specifically Land & Building) to long term receivables. They are subsequently
amortised over the lease period.
Borrowings
Borrowings reduced as the value was restated using fair value and not book
value.
Other Non-Current Liabilities
Other Non-Current Liabilities were restated and treated as a provision in the
accounts after some were released subsequent to the year end.
These changes are detailed in the tables below:
Income statement changes
Provisional Results Audited Results
$`000 $`000
Administrative Expenses (56,460) (50,572)
Interest Income Received 3,554 -
Finance Costs (25,464) (20,946)
Profit Before Taxation 29,165 35,861
Income Tax expense (5,269) (13,839)
Minority interest 3,228 2,755
Earning Per Share 3.79 3.37
Impact on earnings per share
Earnings per share Headline Earnings per
Share
Cents Cents
Per provisional results 3.79 2.95
Administrative expenses
Decommissioning costs 0.26 0.26
Accretion discount 0.89 0.89
Additional provisions (0.07) (0.06)
Taxation adjustment (1.50) (1.50)
Per Audited results 3.37 2.54
Balance sheet changes:
Provisional Results Audited Results
$`000 $`000
Long Term Investments 78 256
Long Term Receivables 27,080 38,281
Borrowings 12,078 9,996
Deferred Income Tax Liabilities 4,984 18,557
Retirement Benefit Obligations 1,076 3,373
Other non-current Liabilities 5,500 -
Dividend Payables 15 -
Posting of Oando`s Annual Report and Annual General Meeting
Oando will post its annual report to shareholders on Wednesday, 16 May 2007 and
the Annual General Meeting of Oando shareholders will be held on Wednesday, 30
May 2007 at 10:00 at The Cultural Centre, Mary Slessor Avenue, Calabar, Cross
River State, Nigeria.
Below is the abridged income statement, balance sheet, summarised cashflow
statement, movement in equity of majority shareholders of the Company, as well
as the accompanying notes.
Consolidated Balance Sheet
As at 31 December 2006
ASSETS 2006 2005
$`000 $`000
Non-current assets
Property Plant & Equipment 117,771 108,659
Intangible Assets 113,094 101,999
Long Term Investments 256 -
Long Term Receivables 38,281 31,349
269,402 242,007
Current assets
Inventories 119,835 75,623
Trade & Other Receivables 285,689 250,340
Debenture - -
Cash & Cash Equivalents 60,121 57,769
465,645 383,732
Total assets 735,047 625,739
EQUITY
Capital & Reserves attributable to equity
holders
Share Capital 2,162 2,162
Share Premium 120,742 120,792
Revaluation Reserve 18,475 10,649
Exchange Difference - -
Retained Earnings 28,025 20,034
169,404 153,587
Minority Interest 14,645 10,791
Total equity 184,049 164,378
LIABILITIES
Non-Current Liabilities
Borrowings 9,996 12,781
Deferred Income Tax Liabilities 18,557 9,941
Retirement Benefit Obligation 3,373 8,612
Provisions 2,940 4,111
34,866 35,445
Current Liabilities
Trade & Other Payables 192,161 143,962
Current Income Tax Liabilities 7,342 4,782
Borrowings 316,629 277,172
516,132 425,916
Total Liabilities 550,998 461,361
Total Equity & Liabilities 735,047 625,739
Consolidated Income Statement
For the year ended 31 December 2006
2006 2005
$`000 $`000
Sales 1,647,840 1,381,200
Cost of Sales (1,507,512) (1,249,369)
Gross Profit 140,328 131,831
Selling & Marketing Costs (42,514) (50,734)
Administrative Expenses (50,572) (55,856)
Other Operating Income 9,565 3,862
Operating Profit 56,807 29,103
Shares of Profit of Associates - -
Finance Costs (20,946) (7,511)
Profit Before Taxation 35,861 21,592
Income Tax Expense (13,839) (6,405)
Profit After Expense 22,022 15,187
Attributable to:
Minority Interest 2,755 1,774
Equity Holders of the Company 19,267 13,413
22,022 15,187
Summarised Consolidated Cash Flow Statement
For the year ended 31 December 2006
2006 2005
US$`000 US$`000
Cash and cash equivalents at the beginning of
the period (167,753) 53,625
Net cash inflow used in operating activities 403 (140,700)
Cash used in investing activities (26,934) (55,128)
Net cash flows (used in)/generated from
financing activities 137,130 (25,034)
Exchange gains / (losses) in cash and cash
equivalents 4,714 (516)
Cash and bank overdrafts at end of period (52,440) (167,753)
Consolidated Statement of changes in Shareholder`s Equity
Attributable to equity holders of the Company
Attributable to equity Minorit Total
holders of the Company y equity
Interes
t
Share Other Retaine
capital reserve d
s earning
s
Year ended 31 December 2005 US$`000 US$`000 US$`000 US$`000 US$`000
At start of year
- as previously reported 122,904 18,068 11,959 10,730 163,661
- reversal of revaluation
surplus on leases - 2,321) - - (2,321)
- deferred tax on revaluation
surplus - (4,801) - - (4,801)
- reversal of fair value loss
on receivables - - 530 - 530
- reversal of fair value loss
on borrowings - - 183 - 183
- as restated 122,904 10,946 12,672 10,730 157,252
Restatement of residual
values - - 7,530 - 7,530
Deferred income tax effect of - - (2,259) - (2,259)
residual values
Other consolidation - - (2,672) (1,852) (4,524)
adjustments
Currency translation - (297) - 139 (158)
differences
Net gains/(losses) recognised
directly in equity - (297) 2,599 (1,713) 589
Profit for the year - - 13,413 1,774 15,187
Total recognised income for - (297) 16,012 61 15,776
2005
Dividends:
- Final for 2005 - - (8,650) - (8,650)
At end of year 122,904 10,649 20,034 10,791 164,378
Year ended 31 December 2006
At start of year
- as previously reported 122,954 18,027 20,142 10,969 172,092
- reversal of revaluation
surplus on leases - (2,321) - - (2,321)
- deferred tax on revaluation
surplus - (4,801) - - (4,801)
- reversal of fair value gain
on receivables - - (1,932) 254 (1,678)
- reversal of fair value loss
on borrowings - - 1,518 (432) 1,086
- transfer of currency
translation differences (50) (256) 306 - -
- as restated 122,904 10,649 20,034 10,791 164,378
Fair value gains on available-
for-sale financial assets
- 177 - - 177
Currency translation - 7,649 - 1,099 8,748
differences
Net gains recognised directly
in equity - 7,826 - 1,099 8,925
Profit for the year - - 19,267 2,755 22,022
Total recognised income for - 7,826 19,267 3,854 30,947
2005
Dividends:
- Final for 2005 - - (11,276 - (11,276
) )
At end of year 122,904 18,475 28,025 14,645 184,049
Notes to reviewed results
1. General information
Oando Plc (formerly Unipetrol Nigeria Plc) was registered by a special
resolution as a result of the acquisition of the shareholding of Esso Africa
Incorporated (principal shareholder of Esso Standard Nigeria Limited) by the
Federal Government of Nigeria. The Company was partially privatised in 1991. It
was however fully privatised in the year 2000 consequent upon the sale of
Federal Government`s 40% shareholding in the Company. 30% was sold to core
investors (Ocean and Oil Investments Limited) and the remaining 10% to the
Nigerian public. In December 2002, the Company merged with Agip Nigeria Plc
following its acquisition of 60% Agip Petroli`s stake of Agip Nigeria Plc in
August of the same year. The Company formally changed its name from Unipetrol
Nigeria Plc to Oando Plc in December 2003.
Oando and its subsidiaries (together "the Group") have their primary listing on
the Nigerian Stock Exchange.
The Group has marketing and distribution outlets in Nigeria, Ghana and Togo and
other smaller markets along the West African coast.
2. Summary of significant accounting policies
The principal accounting policies applied in the preparation of these
consolidated financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated.
2.1 Basis of preparation
The consolidated financial statements of Oando have been prepared in accordance
with International Financial Reporting Standards (IFRS). The consolidated
financial statements have been prepared under the historical cost convention, as
modified by the revaluation of land and buildings, and financial assets and
financial liabilities at fair value through profit or loss.
The preparation of financial statements in accordance with IFRS requires the use
of certain critical accounting estimates. It also requires management to
exercise judgement in the process of applying the Group`s accounting policies.
Early adoption of standards
In 2004, the Group early adopted the IFRS below, which are relevant to its
operations. These have been consistently applied in these financial statements
for 2006.
IAS 2 (revised 2003) Inventories
IAS 8 (revised 2003) Accounting Policies, Changes in Accounting Estimates and
Errors
IAS 10 (revised 2003) Events after the Balance Sheet Date
IAS 16 (revised 2003) Property, Plant and Equipment
IAS 17 (revised 2003) Leases
IAS 21 (revised 2003) The Effects of Changes in Foreign Exchange Rates
IAS 24 (revised 2003) Related Party Disclosures
IAS 27 (revised 2003) Consolidated and Separate Financial Statements
IAS 28 (revised 2003) Investments in Associates
IAS 32 (revised 2003) Financial Instruments: Disclosure and Presentation
IAS 33 (revised 2003) Earnings per share
IAS 36 (revised 2004) Impairment of Assets
IAS 38 (revised 2004) Intangible Assets
IAS 39 (revised 2003) Financial instruments: Recognition and measurement
IFRS 2 (issued 2004) Share-based payments
IFRS 3 (issued 2004) Business Combinations
IFRS 5 (issued 2004) Non-current Assets Held for Sale and Discontinued
Operations
The early adoption of IAS 10 has resulted in a change in the accounting policy
for dividends. Proposed dividends, which were previously recognised in the year
prior to the declaration, have been adjusted in accordance with IAS 10 and 37
respectively.
The application IAS 16 has affected the accounting for fair value reserve
relating to revalued land and buildings upon disposal.
Under previous GAAP, the revaluation surplus included in equity in respect of an
item of property, plant and equipment were transferred to the income, when the
asset is disposed of, to determine profit on disposal. Adjustments have been
passed to transfer the related amounts directly to retained earnings in
accordance with IAS 16. Also, early adoption of IAS 16 (revised 2004) has
necessitated the disclosure of prior year comparatives for all movements in
property plant and equipment.
IAS 21 (revised 2003) has affected the translation of foreign entities` income
statements, on which closing rates were previously applied but now amended and
translated at average rates. The functional currency of each of the consolidated
entities has also been re-evaluated based on the guidance to the revised
standard. All the Group entities have the same functional currency as their
presentation currency. These financial statements have been presented in a
currency other than the Company`s functional currency, being US Dollars, to meet
the filing requirements of the JSE.
IAS 24 (revised 2003) has affected the identification of related parties and
some other related-party disclosures.
IAS 27 (revised 2004) has affected the consolidation of subsidiaries. Certain
subsidiaries, which were not included in the consolidation under previous GAAP
have now been consolidated.
The early adoption of IAS 33 has resulted in a change in the computation of
earnings per share. Earnings per share, which were previously computed on the
basis of the number of shares in issue at the end of the reporting period, have
been adjusted on the basis of the weighted average number of shares in
accordance with IAS 33
The early adoption of IAS 39 has resulted in a change in accounting for
financial assets and liabilities.
Although the Group did not have any share-based payments as at the balance sheet
date, upon adoption of a scheme, which is currently being considered by the
Group, all share based payments will be accounted for under IFRS 2.
The early adoption of IFRS 5 has resulted in a change in the accounting for non-
current assets held for sale and discontinued operations as qualifying assets
have been reclassified accordingly.
The early adoption of IFRS 3, IAS 36 (revised 2004) and IAS 38 (revised 2004)
resulted in a change in the accounting policy for goodwill. Until 31 December
2002, goodwill was:
- Amortised on a straight line basis over a period ranging from 5 to 20
years; and
- Assessed for an indication of impairment at each balance sheet date.
In accordance with the provisions of IFRS 3:
- The Group ceased amortisation of goodwill from 1 January 2003;
- Accumulated amortisation as at 31 December 2002 has been eliminated with a
corresponding decrease in the cost of goodwill;
- Goodwill was tested for impairment at 1 January 2003, the transition date.
Also, from the year ended 31 December 2003 onwards, goodwill is tested annually
for impairment, as well as when there are indications of impairment. The Group
has also reassessed the useful lives of its intangible assets in accordance with
the provisions of IAS 38. No adjustment resulted from this reassessment.
All changes in the accounting policies have been made in accordance with the
transition provisions in the respective standards.
The early adoption of IAS 1, 2, 8, 17 28, and 32 (all revised 2003) did not
result in substantial changes to the Group`s accounting policies. In summary:
- IAS 1, 2, 28 and 32 had no material effect on the Group`s policies.
- IAS 8 (revised 2004) has resulted in the disclosure of the impact of new
standards
2.2 Consolidation
(a) Subsidiaries
Subsidiaries include all entities (including special purpose entities) over
which the Group has the power to govern the financial and operating policies
generally accompanying a shareholding of more than one half of the voting
rights. The existence and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing whether the Group
controls another entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated from the date
that control ceases.
The purchase method of accounting is used to account for the acquisition of
subsidiaries by the Group. The cost of the acquisition is measured as the fair
value of the assets given, equity instruments issued and liabilities incurred or
assumed and the date of plus costs directly attributable to the acquisition.
Identifiable assets acquired and liabilities and contingent liabilities assumed
in a business combination are measured initially at their fair values at the
acquisition date irrespective of the extent of any minority interest. The excess
of the cost of acquisition over the fair value of the Group`s share of the
identifiable net assets acquired is recorded as goodwill. If the cost of
acquisition is less than the fair value of the net assets of the subsidiary
acquired, the difference is recognised directly in the income statement. All
balances and unrealised surpluses and deficits on transactions between group
companies have been eliminated. Where necessary, accounting policies for
subsidiaries have been changed to be consistent with the policies adopted by the
Company. Separate disclosure (in equity) is made of Minority Interests.
(b) Associates
Associates are all entities over which the Group has significant influence but
not control, generally accompanying a shareholding of between 20% and 50% of the
voting rights. Investments in associates are accounted for by the equity method
of accounting and are initially recognised at cost. The Group`s investment in
associates includes goodwill (net of any accumulated impairment loss) identified
on acquisition. The Group`s share of its associates` post-acquisition profits or
losses is recognised in the income statement, and its share of post acquisition
movements in reserves is recognised in reserves. The cumulative post-acquisition
movements are adjusted against the carrying amount of the investment.
When the Group`s share of losses in an associate equals or exceeds its interest
in the associate, including any other unsecured receivables, the Group does not
recognise further losses, unless it has incurred obligations or made payments on
behalf of the associate. Unrealised gains on transactions between the Group and
its associates are eliminated to the extent of the Group`s interest in the
associates. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred. The accounting
policies of the associates are consistent with the policies adopted by the
Group.
Goodwill included in the carrying amount of an investment is neither amortised
nor tested for impairment separately by applying the requirements for impairment
testing goodwill in IAS 36, Impairment of Assets. Instead, the entire carrying
amount of the investment is tested under IAS 36 for impairment.
All subsidiaries and associates have uniform calendar year ends.
2.3 Segment reporting
A business segment is a group of assets and operations engaged in providing
products or services that are subject to risks and returns that are different
from those of other business segments. A geographical segment is engaged in
providing products or services within a particular economic environment that are
subject to risks and return that are different from those of segments operating
in other economic environments.
2.4 Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Group`s entities are
measured using the currency of the primary economic environment in which the
entity operates (`the functional currency`). The functional currency of the
Group is the Naira. The consolidated financial statements are presented in US
dollars, which is the company`s presentation currency for the purpose of filing
outside Nigeria.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using
the exchange rates prevailing at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of such transactions and from the
translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the income statement, except
when deferred in equity as qualifying cash flow hedges and qualifying net
investment hedges.
(c) Group Companies
The results and financial position of all the group entities (none of which has
the currency of a hyperinflationary economy) that have a functional currency
different from the presentation currency are translated into the presentation
currency as follows:
1. Assets and liabilities for each balance sheet presented are translated
at the closing rate at the date of that balance sheet;
2. Income and expenses for each income statement are translated at average
exchange rates; and all resulting exchange differences are recognised
as a separate component of equity.
3. On consolidation, exchange differences arising from the translation of
the net investment in foreign entities are taken to shareholders`
equity. Upon disposal of part or all of the investment, such exchange
differences are recognised in the income statement as part of the gain
or loss on sale.
3. Earnings Per Share
Basic Earnings Per Share (EPS) is calculated by dividing the Profit Attributable
to the equity holders of the Company by the weighted average number of shares in
issue during the period.
2006 2005
Profit attributable to equity holders of the Company
($`000) 19,267 13,413
Weighted average number of shares in issue
(thousands) 572,301 572,301
Basic Earnings Per Share (cents) 3.37 2.34
Diluted
Profit attributable to equity holders of the Company 19,267 13,413
Weighted average number of shares in issue
(thousands) 572,301 572,301
Adjustment for Bonus issues - -
Weighted average number of shares for diluted
Earnings Per Share (thousands) 572,301 572,301
Diluted Earning Per Shares (cents) 3.37 2.34
Headline Earnings Per Share
Profit Attributable to equity holders of the Company 19,267 13,413
Adjusted for:
Profit on sale of property plant and equipment (4,904) (32)
Loss on sales of investment in affiliate companies - 25
Tax thereon 172 -
14,534 13,406
Headline Earnings Per Share attributable to earnings
basis (cents) 2.54 2.34
Headline Earnings Per Share attributable to diluted
earnings basis (cents) 2.54 2.34
Net Assets Per Share (cents) 32.13 28.72
Tangible assets per share (cents) 20.50 18.99
4. Independent audit by the auditors
These condensed consolidated results are currently being audited by our auditors
PricewaterhouseCoopers who perform their audit in accordance with the
International Standards on Auditing. The results have been reviewed by
PricewaterhouseCoopers whose unqualified review opinion is available for
inspection at the Company`s registered office.
5. Post balance sheet events
There are no significant post balance sheet events.
For and on behalf of the Board
Mr J Adewale Tinubu
Group Chief Executive Officer
16 May 2007
Registration number: RC 647
External company registration number: 2005/038824/10
Share Code on the JSE Limited: OAO
Share Code on the Nigerian Stock Exchange: UNTP
ISIN: NG00000UNTP0
Directorate:
1. General M. Magoro (Rtd.) - Chairman
2. Mr. J. A. Tinubu - Group CEO
3. Mr. O. Boyo - Deputy Group CEO
4. Mr. A. Akinrele SAN - Director
5. Prince F. N. Atako JP. - Director
6. HRM. Oba. A. Gbadebo - Director
7. Mr. O. Ibru - Director
8. Alhaji H. Mahmud - Director
9. Mr. I. Osakwe - Director
10. Mr. O. Osifo - Director
11. Mr Onajite Okoloko - Director
Company Secretary: Mrs. Oredeji Delano
Registered office: 2, Ajose Adeogun Street, Victoria Island, Lagos, Nigeria
Auditors: PriceWaterhouseCoopers, Plot 252E Muri Okunola Street, Victoria
Island, Lagos
E-mail: info@oandoplc.com
Registered office in South Africa: 1st Floor, 32 Fricker Road, Illovo Boulevard,
Sandton, 2196, South Africa
Office of the South African registrars: Computershare Investor Services 2004
(Proprietary) Limited (Registration number: 2004/003647/07)
70 Marshall Street, Johannesburg, 2001. PO Box 61051, Marshalltown, 2107
Sponsor: Deutsche Securities (SA) (Proprietary) Limited
Date: 16/05/2007 14:30:02 Produced by the JSE SENS Department.
