₦airaland Forum

Streetinvestor2:
The main bull is coming. Renu omokiri will soon announce the ASI 120k news and you go see how insurance companies go begin do 10% steady. Politics will push our market to level you go shock soon...
My street sense

Locotrader:
Sweetness of this market is volume.
Na only those who get volume go retire before market crash.
Loco 's prayer is to retire before April 2026.The market will be scary by then

Streetinvestor2:
The main bull is coming. Renu omokiri will soon announce the ASI 120k news and you go see how insurance companies go begin do 10% steady. Politics will push our market to level you go shock soon...
My street sense

Locotrader:
This hopeless Japaul.
If I talk now,na so e go come vex him own.
Make I kukuma close mouth.

Locotrader:
Especially your Royalex

Locotrader:
This hopeless Japaul.
If I talk now,na so e go come vex him own.
Make I kukuma close mouth.

Locotrader:
I am already on the way to 300% in Uyo C.
I am not negotiating my 300% in Lagos C.I will remain there because that is my greatest undervalued stock at the moment

crownprince2017:
After close to 600% on presco, 40% on okomu my ellah is cruising to 200%.

I'm witnessing gain in sugar for the first time.
Patiencetamol is very key after knowledge.


Oyel they print money.

yMcy56:
ZENITH @56....
What's wrong with FBN? Oga never load finish?
Those offers looks like they knowingly stationed them there to prevent price appreciation....
Also FCMB...

PETERiCHY:
Something you will quickly sell after 3% profit

yMcy56:
ZENITH @56....
What's wrong with FBN? Oga never load finish?
Those offers looks like they knowingly stationed them there to prevent price appreciation....
Also FCMB...

Locotrader:
Imagine if I have 100% portfolio in Ellah.
I for retire at 45.

Let me see where my C and C can take me to.

yMcy56:
ZENITH @56....
What's wrong with FBN? Oga never load finish?
Those offers looks like they knowingly stationed them there to prevent price appreciation....
Also FCMB...

DeRuggedProff:
My ChatGpt prompt whenever an earnings report is released :
*ChatGpt Finance Prompt:*
Give me a full detailed and forensic financial and investment analysis of the attached results here. Cover in details the income statement, balance sheet, cash flow, profitability, liquidity, solvency, and valuation ratios. Compare it with industry benchmarks and historical performance. Conclude with a buy, sell, or hold recommendation, with clear reasoning. Peruse in details all the notes in the financial statement and indicate all red flags.
Determine the fair price based on this attached result using at least three most standard valuation models.
Include recent corporate actions or capital raises.
Assess dividend sustainability.
Factor in macroeconomic risks like FX and inflation.
Include chart patterns or breakout signals if possible.
Determine if there is any window dressing of this results. Fish out all grey areas.

I applied this prompt to the current Oando results. See below what I got in response:


ChatGpt:
Here's a forensic and investment-grade financial analysis of Oando Plc’s Q1 2025 unaudited interim report, covering the income statement, balance sheet, cash flows, key financial ratios, red flags, valuation models, and investment recommendation:

🧾 1. INCOME STATEMENT ANALYSIS (Q1 2025 vs Q1 2024)

Metric Q1 2025 (₦’000) Q1 2024 (₦’000) % Change

Revenue 932,574 915,420 +1.88%
Gross Profit 85,426 31,409 +171.94%
Operating Income (120,339) 117,202 N/M
Net Finance Income 67,777 (46,855) +244.6%
Profit Before Tax (52,562) 70,347 N/M
Net Profit (Group) 113,058 59,346 +90.5%

📌 Observation:
Despite a higher net profit, this was due to a massive income tax credit (₦165.6bn). Operating performance was actually negative, driven by a large other operating loss of ₦301.9bn, which warrants scrutiny.

🧮 2. BALANCE SHEET ANALYSIS

Key Highlights (Group):

Item Q1 2025 (₦’bn) FY 2024 (₦’bn)

Total Assets 6,834 6,434
Total Liabilities 7,074 6,795
Equity (240) (361)
Cash and Equivalents 303.9 221.8
Borrowings (Total) 3,038.6 2,772


📌 Observation:

Negative Equity (-₦240bn): Highly concerning. Accumulated losses continue to erode capital.

Borrowings increased by ₦266bn, indicating reliance on debt financing

💰 3. CASH FLOW ANALYSIS

Segment Q1 2025 (₦’000) Q1 2024 (₦’000)

Net Operating CF (176,976) +379,289
Net Investing CF (38,992) (1,197)
Net Financing CF +327,153 (157,465)
Net Change in Cash +111,184 +220,627


📌 Red Flag: Cash flow from operations turned negative, meaning the company is relying on financing activities (mostly new borrowings) to remain liquid.

📊 4. RATIO ANALYSIS

a. Profitability

Gross Margin = 9.2% (vs 3.4% in Q1 2024) ✅

Net Margin = 12.1% (vs 6.5%) ✅ (but driven by tax credit)

ROA ≈ 1.65%

ROE = N/A (Negative Equity)


b. Liquidity

Current Ratio = 1.17x (1,235bn / 1,054bn) ✅

Quick Ratio ≈ 1.0x


c. Solvency

Debt-to-Equity = Negative (₦3.04tr debt on -₦240bn equity) ❌

Debt-to-Assets = 44.5% ❗


d. Valuation Multiples (Estimates; needs market cap):

P/E: Assuming ~₦5/share EPS (quarterly annualized), P/E ~1.5–2x — appears low, but driven by tax credits.

EV/EBITDA: Likely elevated due to poor core earnings.

🔎 5. RED FLAGS & GREY AREAS

1. ₦301.9bn "Other Operating Loss"

This is unusually large. It may relate to FX losses, derivative losses, or asset impairments. Needs clarity from note 4.

2. Tax Credit of ₦165.6bn

Not from core operations. Likely from deferred tax adjustments. Not sustainable.

3. Negative Retained Earnings

Group: (₦181.2bn)

Company: (₦560bn)


4. Window Dressing Indicators

Strong net profit contrasts with poor operating and cash performance — suggest accounting gains.

Large deferred tax asset increase (+₦36bn) and impairment reversals hint at aggressive assumptions.

📌 6. FAIR VALUE ESTIMATION (₦)

Using conservative trailing/forward metrics and industry multiples:

a. Discounted Cash Flow (DCF)

Assuming:

EBITDA ~₦60bn (normalized)

WACC = 18%

Growth = 2%

Enterprise Value = ₦360bn

Debt = ₦3tr → Equity value = Negative


b. Relative Valuation (P/E, EV/EBITDA)

P/E of 4x on sustainable EPS of ₦3 = ₦12 fair value

EV/EBITDA = 5x on ₦60bn → EV = ₦300bn → Negative equity again.


c. Book Value Multiple (P/B)

Book value is negative, so P/B is not usable.

📌 Estimated Conservative Fair Price: ₦8–₦10 (if normalized EPS is sustainable)
📌 Aggressive Valuation: ₦12–₦15 (if full tax credits are repeatable)

📈 7. CHART PATTERNS & BREAKOUT SIGNALS

Do you want me to analyze current NGX price action for OANDO with chart patterns and Ichimoku/Keltner/Volume breakout setups?

🧾 8. DIVIDEND SUSTAINABILITY

No dividend paid

Dividend Payable of ₦1.65bn on books from prior years

Negative equity and cash burn = unsustainable for dividend resumption.

🌍 9. MACRO RISKS: FX & INFLATION

Naira depreciation significantly affects cost of servicing USD debts (Oando has material FX exposure).

High inflation pressures margins and borrowing costs.

Crude oil price volatility remains a core business risk.

🏁 10. INVESTMENT RECOMMENDATION

✅ Verdict: HOLD with High Speculative Risk

Pros:

Revenue stability

Positive tax-driven net profit

Operational asset base with growth potential


Cons:

Negative equity

Cash flow issues

Highly leveraged

Masked core profitability (possible window dressing)

🧠 Strategic Play:

Only for speculative investors betting on oil recovery, asset sale, or restructuring.

Strong activist or institutional moves (like recapitalization) could rerate valuation.

jonnysessy:
What happened to the Chams wey you dey 100%. Don't worry, what i know from experience anything goes up in bulls market. All hope is not lost. Patience is required Loco.

megawealth01:
You are a fast learning person. I love your courage and patience 😘

megawealth01:
If you followed me into CUTIX. Follow me now into C and I leasing. This is not a recommendation. It's just for those that followed my CUTIX call that year...

Buy C and I Leasing with a PATIENT FUND and forget about it. They are serious with the repositioning of that COY. IT'S HUGE if you ask ME

C and I is officially my 12th CALL for 2025


DYOR

SonofElElyonRet:
100% done and dusted.. when the commissioning of the mill is done, it'll be on steroids

Agbalowomeri:
Well it's still a pointer to what to the financial engineering to expect when Oando starts making the billions. Exceptional items will be appearing

Princkez:
What's wrong with HONYFLOUR....can't cross #22

phadriz:
JAPAULGOLD is always the last to move and the movement is always bang. I remember the 2023 movement from 0.2.

I believe the performance will surpass ELLAHLAKES

Streetinvestor2:
The main bull is coming. Renu omokiri will soon announce the ASI 120k news and you go see how insurance companies go begin do 10% steady. Politics will push our market to level you go shock soon...
My street sense

emmanuelewumi:
And come out of retirement at 47, start looking for entry level jobs