Profit at downstream oil company Conoil Plc slowed to the weakest in five years in the first half of 2025 as a wave of falling revenues, thinning margins, and soaring finance costs battered the oil marketer’s bottom line.
Net income for the six months ending June 30 fell 89 percent to N900 million, compared with N8.02 billion in the same period a year earlier, according to the company’s unaudited financial results filed with the Nigerian Exchange. That translates to 130 kobo in earnings per share, down sharply from N11.56 last year.
Conoil’s revenue dropped by 20.4 percent year-on-year to N143.65 billion, down from N180.57 billion a year earlier. The company blamed weaker sales volumes across its flagship “white products” segment—primarily petrol, diesel, and aviation fuel, which accounted for over 96 percent of its revenue base.
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Despite a corresponding 19 percent drop in cost of sales, gross profit fell 35 percent to N11.36 billion, erasing much of the company’s pricing cushion. Distribution expenses rose 19 percent to N2.24 billion, and admin costs stayed flat, but the real blow came from surging finance expenses.
Conoil’s finance cost more than doubled to N4.76 billion, up from N2.22 billion in H1 2024. While borrowings declined to N21.5 billion from N28.7 billion at year-end 2024, the impact of high interest rates on its overdraft-heavy funding structure was acute. Interest payments alone wiped out 42 percent of the company’s gross profit.
The oil company chaired by billionaire Mike Adenuga, however, posted positive cash flow from operations of N12.57 billion, up from N8.8 billion a year earlier, driven largely by inventory drawdowns and stronger cash collections.
But its cash and cash equivalents remained in negative territory at N13.6 billion, a hangover from an earlier aggressive inventory build-up and credit sales push aimed at retaining market share.
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Trade receivables surged to N89 billion, a 24 percent jump from the December 2024 level, raising questions about the company’s working capital discipline and risk management amid Nigeria’s inflationary and liquidity-constrained environment.
Q2 rebound not enough to turn the tide
Conoil’s performance improved modestly in Q2 2025, posting N608 million in net profit, up from N292 million in Q1. But the rebound wasn’t enough to reverse the damage done in the first quarter, when interest payments and soft sales nearly erased earnings.
Management offered no earnings guidance or dividend update in the report, and retained earnings ticked up only slightly to N36.22 billion, from N35.3 billion at year-end 2024. Net asset value per share fell to N58.20 from N59.32 a year ago.
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Conoil’s steep reliance on white products, which accounts for over 95 percent of total sales, makes it especially vulnerable to regulatory shifts, pricing competition, and FX volatility. The lack of diversification into LPG or higher-margin lubricant segments appears to be weighing on earnings resilience.
With new competition from Dangote Refinery likely to disrupt the downstream market and potentially reshape supply economics, Conoil faces a tougher landscape where cost efficiency and portfolio rebalancing will be key.
Shares of Conoil Plc have fallen 39.4 percent year-to-date to N245 per unit despite beginning 2025 at N387.2, signalling a loss of investor confidence in the oil marketer’s near-term outlook.
