Oando Plc announced a loss after tax of N179 billion for the financial year ended on December 31, 2014.
This is against the backdrop of a profit after tax of N4.68 billion posted in 2013.
This is contained in a statement by the company in Lagos.
It said the company recorded a turnover of N424.68 billion compared to N449.87 billion recorded in the corresponding period, 2013.
The statement added the company for the six month ended on June 30, declared revenue of N60.32 billion against N55.67 billion posted in the comparative period in 2014.
According to the statement, the loss after tax stands at N34.68 billion in contrast with the profit after tax of N5.74 billion achieved in 2014.
The statement quotes Mr Wale Tinubu, the Group Chief Executive Officer, as saying that the company would bounce back into profitability in 2016.
It said the company’s profit after tax numbers were impacted by impairments of N76.9 billion in exploration and production, N16.9 billion in under lift and N7.3 billion foreign exchange losses, among others.
The statement said appropriate consolidation of Oando’s subsidiaries’ accounts and painstaking due diligence undertaken as a result of the magnitude of impairments contributed to the delay in the release of its accounts.
“Upstream players have been forced to record significant reductions in the fair value of their asset portfolios.
“Oando is no exception to this global trend, which has led us to recognise about N76.9 billion of impairment charges in our exploration and production business,” the statement added.
It also said that the impairment was due to lower oil prices leading to a reduced valuation of certain exploration and appraisal assets.
“The nature of the business makes us extremely vulnerable to foreign exchange risks as we import in dollar denomination and recover our costs in naira.
“The delay of payments of subsidies from the Federal Government has served to increase this vulnerability and led to a realisation of N7.3 billion in foreign exchange losses,” it said.
