₦airaland Forum

emmanuelewumi:
Yes most ballers and socialites are highly indebted, they will always use debt to service debt


Pray you don't work for an employer who is a socialite or a baller

Prayer time?
Pray for a successful joggling of short term cash flow and smooth turnaround of the business. Pray dividends start rolling from this year cashflow. Pray book value turns positive this year so that analysts can start their valuation calculations with audited and unaudited financial statements. Pray pray pray

Tpharell:
Now, this is a rather bleak picture!
But Uche is able to keep up appearances, and is considered the toast of the town amongst young women in the area.

A real toast of the town as restaurants and clubs are making tons of money as the ladies flirt with Uche all over the place. Meanwhile Emeka no give the restaurants and clubs any reason to smile as his trade volumes are small.

emmanuelewumi:
No record of free cash flow for Uche, infact he had to sell his Jeep, land and house in order to enhance liquidity yet his liabilities are more than his assets


Another major problem with him is with his working capital

He found out he could get cheaper loans from First Bank, so he got another loan from First Bank in order to settle Access Bank because those guys at Access are Badass

He made cash from his buying and sell business as well as from his production business now. Yes he sold the house and jeep to liquidate some labilities as the jeep is just a fuel guzzler wasting money away in this time of high fuel price. While that house is not really an investment as it was a loss making venture as tenants don't pay timely, neither is the property full accupied and there are always repairs to be done amongst other fees. He is not doing too badly joggling his working capital.

emmanuelewumi:
Assuming the N300 million asset of Emeka and Uche generate the same annual cash flow of N100 million per annum.

Emeka can use N70 million to service his N160 million debt, reinvest in his business.


Whereas the N70 million annual cash flow of Uche can't service his N350 million debt. He will rely on overdraft for the running of his operations, will always be renegotiating loans with his bank, will be using debts to service debt


The only way Uche can get out of this quagmire is recapitalize his business, inject more capital in form of equity.

But debt is not the biggest item in Uche's liabilities. But provisions for the school he opened with his side-chick to settle omo-onile as well as provision he made for removing his business when he retires. He infact has not spent the provision but set aside the money on paper. Yet his JV school and assets are generating surplus cash. He pays his bankers, employees and contractors as when due and still had surplus cash.

Uched has no need for recapitalization to run current business. He only needs more money to fund new diamond mining assets he just acquired.

Interesting. Zenith mark down today by N1 for dividend payment does not look obvious because of the N38 closing price on Friday So buying today means I am not entitled to dividend. Making the PO offer a discount of 50 kobo today for one interested in loading up through PO route, while getting a N1 discount if one still has rights not yet taken.

mikeapollo:
I suspect FBNH will be coming to raise capital.
Expect UBA soon after FBNH

A power play is still ongoing in FBNH, difficult to forecast timing of their capital raise. However, I forecast they'll wait till next year especially UBA.
it's better they wait for a year while dishing out better dividends to excite investors, while proving they have gone up a notch in financial strength. They can only prove this through increased dividend payments. This will then make the market adjust their valuations up.

KarlTom:
I don't think they are going to decommission any of NAOC assets.

All assets will be decommissioned at the end of their service life. The provisions are just setting aside money for this when they occur in future. So that assets will not pose danger to people when they are no more in use for operations.

Tpharell:
Good and objective take.
Take note also that the decommissioning provision is a new regulatory requirement of the PIA which the NUPRC is enforcing in the divestments. I know for a fact it is one of the things holding back the Mobil/ Seplat deal as the fund had not initially being factored in the deal. The divesting assets are old and some are close to their design end life, upon which they need to be decommissioned. The PIA framers thought it wise to make provision for a dedicated fund for that activity

Oando booked a higher provision for decommissioning activities of N176b compared to SEPLAT's N117b in 2023. Even though they both reported having N3T worth of assets in 2023

IYGEAL:
Exactly what Oga Agba pointed out and I seconded.

I like how the company comes up to swiftly refute any and all publications it deems untoward. It's possible the publishers must have tried to persuade the company to agree with them and it (the company) refuses. A smaller player would have easily been rough-handled.

Indeed, may the liberation finally arrive.

Chai. See the bolded.

godlyguy:
OANDO shot themselves in the leg while trying to MEDIA HYPE.
They should just improve on the financials instead of all these unnecessary media dramas

emmanuelewumi:
Leave matter for Mathias. You are sounding like a broken record.
Chill till the result is out.
Although I don't expect much as per the negative shareholders fund or insolvency status of the business business for the next 2 years and above

On your quoted Investopedia picture, I don't think (I am not sure as I rely only on their published financial statements - perhaps another media hype) the plc is insolvent as it still meets its payments to lenders. Also, it generated a positive cashflow from operations in the unaudited 2023 FY published. Infact its cash balance grew in 2023 after cashflow payments to lenders and cashflow out for investment activities, suggesting a turnaround has commenced. Looking closely at the make-up of liabilities a sizeable amount is provision for expected settlements that arose in 2023 plus also provisions for decommissioning activities. If one looks at quarter on quarter perhaps one will have a better clue at that provision to see if there is possibility for the final amount coming out higher or smaller. Also, Oando appears prudent for putting provisions for decommissioning activities in its liabilities. It is worth cross-checking if other local oil production companies like SEPLAT and ARADEL have provisions for decommissioning activities and to understand what exactly the provisions are for.

This is not a warning or Sell or Buy recommendation. But a discuss. Oando may fall or rise in price.

BullBearMkt:
What's SHF bros?

That’s too simple for you

robobo:
Too ambitious

Should be clearer in another couple of weeks.

mikeapollo:
You may be right, after all.
I was only being very conservative and cautious in my expectations of Oando's performance in 2024.

I read a report on the 2023 results stating that its oil exploration and production activity constituted only 4% of total revenue, but contributed 53% of operating profit and 41% of pre-tax profit, indicating very high margins.
If this trend is sustained or improved on, then the ENI assets (which fall under production) could make very huge impact for Oando, starting from Q3 2024

If SHF remains negative in 2024 it means wahala. Price may start going down or never shoot above 100

mikeapollo:
Oando's shareholders fund position can only improve a bit; I doubt if it would turn to positive with the 2024 results. May be in 2025 or 2026

Oando had a negative SHF of N214b in unaudited 2023 from a priot year negative SHF of N183b. Its rate of depletion of shareholder funds decelerated in 2023. The depletion of shareholder funds started in 2019 with a huge acceleration.

Looking at SEPLAT. Its shareholder funds increased in 2023 by N800b

Oando should be able to get a positive SHF in 2024 mid year assuming its unaudited 2023 is not restated. This is premised on SEPLAT's SHF growing by another N1000b in the first six months of 2024. Turning a negative N214b shareholder's fund to positive right now should not be a beggie for OANDO. Otherwise it has very very very serious issues.

Yemy3m:
Oando still in debt but income near double.
Result out soon.
Dnt sell.

Is the shareholders funds now positive.

Someone asked about the domestic dollar bond. It was over-subscribed.

The federal government had on Wednesday announced the raise of over $900m from its debut $500m domestic dollar-bond offer that closed last month, August 30,2024, with an interest rate of 9.75 percent per annum for 5 years.

The relatively high coupon, set at a spread of +600 basis points over US Treasuries, seems to have attracted both retail and institutional investors.

The minister noted that the successful issuance underscores the government’s commitment to diversifying its sources of funding and bolstering economic growth despite current economic challenges.

The funds raised from this bond issuance are set to be channeled into critical infrastructure projects and development programs that will bolster Nigeria’s economic growth.

According to Edun, the forthcoming listing of the dollar-denominated bond on the Nigerian Exchange (NGX) and FMDQ Securities Exchange will position Nigeria as a key player in deepening its capital markets and promoting financial inclusion.
https://businessday.ng/news/article/naira-rallies-on-record-domestic-dollar-bond/

Bloomberg noted that the bond sale played a significant role in boosting investor sentiment, contributing to the naira’s recent strength against the dollar.
https://punchng.com/naira-surged-by-4-8-after-domestic-dollar-bond-sale/

yMcy56:
He's actually planning that....
He said this in a press briefings with The Nations on September 11, 2024......and we say AMEN to that....

Link posted here earlier.....

https://thenationonlineng.net/japaul-set-to-unlock-1-6b-gold-bank-amid-recapitalisation/

Thanks for this. Jegede's plan to pay dividends without ceasing is a powerful one. But Japaul is a little pricey and risky now for new purchases in the market. Tempted to average up. Best not to sell instead, even if the price swings up should it swing up as it is looking good for long term investment.

cocolacec:
fbnh on full bid.

Let's see if it can test N40 again.

chimex38:
No single African

Perhaps due to no indigenous writing we don't have, "preserved records" of how the things we achieved came to be. Like the gold works in Ghana that the British took away as it was state of the art back then. Or the Benin bronze works that the British also took. And many other things that are of African origin like immunization that the West got from an African immigrant in America centuries ago.

godlyguy:
Dreams in investments. Africa end dreams plus religion

Please the dreamers should help Nigeria out of this mess

Meta AI response

Several inventions and discoveries have been attributed to dreams:

1. Penicillin: Alexander Fleming's dream led him to discover penicillin in 1928. He dreamed of bacteria being destroyed by a mold, which inspired him to experiment and discover the antibiotic properties of penicillin.

2. Periodic Table: Dmitri Mendeleev's dream helped him finalize the periodic table of elements in 1869. He reportedly saw the elements arranged in a logical order in his dream.

3. Telephone: Elias Howe's dream inspired him to invent the first practical sewing machine in 1845. He dreamed of being taken captive by a group of natives who were dancing around him with spears that had holes in the tips, which led him to design the needle with an eye at the point.

4. Theory of Relativity: Albert Einstein's dreams and thought experiments contributed to his development of the theory of relativity, although he didn't directly attribute it to a single dream.

5. Paul McCartney's "Yesterday": The melody for the Beatles' hit song "Yesterday" came to Paul McCartney in a dream in 1965.

6. Mary Shelley's "Frankenstein": Mary Shelley's dream inspired her to write the classic novel "Frankenstein" in 1816.

7. Elias Howe's Sewing Machine: Howe's dream, mentioned earlier, also helped him design the first practical sewing machine.

8. Niels Bohr's Atomic Model: Niels Bohr's dream led him to propose the planetary model of the atom in 1913.

9. Robert Louis Stevenson's "Dr. Jekyll and Mr. Hyde": Stevenson's dream inspired him to write the classic novel "Dr. Jekyll and Mr. Hyde" in 1886.

10. Srinivasa Ramanujan's Math Formulas: The Indian mathematician Srinivasa Ramanujan claimed that his dreams often revealed mathematical formulas and insights.

While dreams can inspire creativity and problem-solving, it's essential to note that hard work, dedication, and expertise are also crucial for turning dream-inspired ideas into reality.

ololufemi:
These banks are minting money o! 🤑 💸 💰 🏦 🏧

Seeing that GT Bank PLC's result, I am not surprised because for every currency note deposited into the banking system, these banks use a significantly high percentage of it to create money in the economic system through lending, credit or investment systems.

A sizeable chunk of the unrealized gains is due to naira devaluation against the dollar and other international currencies. To the bank investor that's good. For many other companies with sizeable physical assets their book values may be understated as the cost of replacement of those assets has gone up significantly due to naira devaluation. However, for such companies it's better they are making some profits. The book value (net assets) of banks is relatively up to date while that of manufacturing companies in these periods of massive devaluation are more likely to be understated. Hence banks can get price to book less than one. While manufaturing businesses will have theirs far above one. May not be worth putting too much weight on price to book in this naira deprecation cycle.

Profit from operations is far more important!!! than unrealized gains (from more valuable assets) due to a reporting currency that is losing purchasing power relative to those assets.

Mpeace:
Forget about that minister. See what he said about seplat deal. Target of 600,000 bbls per day

That means Seplat has far more production capacity & assets than Oando.

KarlTom:
I was also shocked with the trade volume.
Maybe it's a 'final day' rush.
I doubt we'll have such volume again anytime soon...

Looks more like final day dump by sellers and defense by strategic buyer to prevent price falling below offer price. What could be causing the sell pressure ?

KarlTom:
Countries are making the gradual transition to renewables and I believe that they should be commended AND emulated.

Nigeria 'lost' about 20years due to non refining.

One of the major reason these IOCs are ditching their assets is a transition to renewables

I don't think we should take this 'news' as a pinch of salt because, at the end of the day, they are our buyers...

I did a SEPLAT analytical review for adult night school assignment nearly a decade ago when the price was under N200 and I rated it a Strong Buy. But to buy then in market I refused due to the erroneous thought oil is going and the future is renewables. Global warming bla bla. What a big mistake

Ginalex:
UBA want us to offer pink alligator as sacrifice before they release their half year results and interim dividend payout. But my mind dey tell me say na 50kobo them go still pay

I bet it will be around N1 otherwise they won’t get a good market supported price for their CBN mandated re capitalization.

2zona:
But investors will be more concerned about PAT and EPS than assets to decide which way to go.

True.
But by the time future PAT and EPS are well established in print, the market will price them in and massive price appreciation will be muted to steady gradual rise.

2zona:

https://www.youtube.com/watch?v=iLjbWIZ9YU0?si=aqF5qcpcrsElIoCA

Nice video. Like the closing which highlights Oando’s focus to deliver value to shareholders.

Thinking:
Looking ahead to upcoming AFS, Oando will likely report more assets than Seplat will report above the N3T assets they both reported for last year. Hence my earlier valuation for Oando based relatively on assets may be understated

Payunsin:
My Oando I sold on Tuesday, dem never credit me ooo
Habi EFCC dey investigate where I see that kin money?

Maybe Capital gains Tax need to be deducted for the gains above N200m that is being cashed out.
They will want capital gains tax but will not give capital loss refund from Tax purse to investors who lose capital.
Abi how does the capital gains tax kick-in or work?

BabsO2:
OANDO jet cruising at full throttle. Now at full bid, mopping of offers taking place at N81.40 a perfect 10% on yesterday's N74.
N1b traded so far at this minute.

GeeKudi:
I am so pained I couldn't get more yesterday.

Looks like sellers are eyeing a 3 digit price. Will the strategic buyer(s) buy above N99.99 next week or stick to buying at a max of about N90

OANDO jet cruising at full throttle. Now at full bid, mopping of offers taking place at N81.40 a perfect 10% on yesterday's N74.
N1b traded so far at this minute.

ProphetUtuocha:
Those who had sought should make haste to get now
For soon, vey soon, another great wind shall come
And they shall seek and shall not get

The N7 payout now out of view .
Oando has not chopped money when compared to FBNH or Transcorp.
In 2023 the following amounts changed hands in FBNH/Transcorp/Oando respectively NGN(b) 165/44/20
In 2024 by close of business yesterday only NGN(b) 110/82/57 has changed hands respectively.

There should still be enough fuel for the wind. It's all up to the strategic buyer(s)

NB:
Not a Sell or Buy recommendation. Prices may go further up or down. An observation is just shared concerning the fuel for the jet engines and the great wind (mechanical thrust) from the turbine engines. It's the call of the strategic Oando buyer(s) if the price will go further up or down in the short term of weeks / couple of months. And it's a positive Net shareholders funds and good earnings that will sustain the engines in the months ahead.

KarlTom:
We eagerly look forward to more positive CORPORATE ACTIONS this September...

NGN Dividend Action please. That's a desirable positive action from OANDO before the year runs out.

And a quarterly financial statement with net positive assets for those asking for net Assets to get a belated one for their valuation computations is desirable.

Not a sell or buy recommendation. Oando price may go down or up. Please do your DD