OANDO PLC: BATTLE TO SURVIVE.

Oando PLC , the petroleum products marketing group still nurturing continental impact, is currently in an epic battle for survival. That is, if the interim figures to June 2015 are anything to go by.
From most angles of vision, it is red alert all the way for Oando. Firstly, it looks  very certain that the company is headed for its second year in the loss league after closing 2014 with N183893.2m loss.
This is because by June 2015 N38583.2 loss had been recorded already compared with N8571.9m profit at the same time in 2014.
Secondly the lone good news in the figures was that turnover increased to N60319m from N55670m thus raising hopes that the drop recorded in 2014 was being reversed.
Beyond this. its showers of troubles for OANDO as its cost of sale more than doubled to N36625.5m and gross profit for the same half year dropped to N23693.5m from N40839.1m.
That the interim selling and distribution cost decreased to N24.2m was helpful but that was nothing in the face of the pressure from administration expense closing at more than twice the 2014 corresponding figure of N14831.9m ( it was N36746.7m by last June); the rise in loss from other operations and more importantly, leap in net finance charges to N24182.9m deficit as against N12612.6m short fall in June 2014.
At N197978.9m Oando's short term borrowing was considerably lower than June 2014's N311013.6m apparently in a bid to cut down finance charges.
The catch though was that the money came from receivables down by half; inventories drawn down to only N4688.1m from N26970.4m and closing cash which by June 2015 was N8502.2m as against N27439m previously.
What is more, even though trade payables dropped to N127345.9m from N156627.6m, the group's working capital position closed June in a more precarious state compared to year end 2014.
* Oando may have to take a serious second look at its continental ambitions and local modus operandi.
* Perhaps, shareholders should get prepared to inject new funds soon if not it will be hard for Oando to recover a second year in the loss league.

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