Oando Plc on Monday notified the Nigerian Stock Exchange (NSE) that its expected earnings for the second quarter ended June 30, 2016 would be below 2015 figures due to naira devaluation.
This is contained in earnings guidance statement by the company to the stock exchange.
The company said that it would report lower earnings for the second quarter of 2016 due to the impact of the naira devaluation against the dollar which resulted to unrealised foreign exchange losses.
It explained that the announcement was based on the unaudited financial statements for the period ended June, 30 2016.
The statement stated that the devaluation by the Central Bank of Nigeria (CBN) would amount to an unrealised foreign exchange loss arising from dollar denominated liabilities, outstanding bank trade facilities and vendor payables.
It said that the company had 261 million dollars in its naira dominated earnings businesses as at the time of the devaluation consisting of 68million dollars in core loans.
In addition 89 million dollars in bank trade facilities, 83 million dollars in asset financing and 21 million dollars in other payables.
“A circa 40 per cent devaluation in the value of the naira against the dollar from the bank rate of N199 per dollar to N280 per dollar has effectively resulted in these significant foreign exchange losses,” it added.
The statement said that the company would return to profitability in spite of the challenging operating landscape of 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.
We remain confident in our diversified business model and the long-term prospects for growth in Nigeria and beyond,” it said.
