Oando Envisages Lower Earnings on Naira Devaluation – THISDAY

Goddy Egene

Oando Plc has said it would record lower earnings for the second quarter ended June 30, 2016.

In a notification to the Nigerian Stock Exchange (NSE), the oil firm said the lower earnings would result from the impact of the Naira devaluation by the Central Bank of Nigeria that is expected to amount to an unrealised foreign exchange loss arising from United States dollars (USD) denominated liabilities, outstanding bank trade facilities as well as vendor payables.

Oando said: “As at the time of the devaluation the company had USD denominated borrowings of $260 million in our Naira dominated earnings businesses, consisting of ~$68 Million in core loans, $89 million in bank trade facilities, $83 Million in asset financing and $21 million in other payables.

A 40 per cent devaluation in the value of the Naira against the US dollar from the bank rate of N199.00:$1.00 to N280.00:$1.00, has effectively resulted in these significant foreign exchange losses which we have prudently booked into our financial statements.”

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