Conoil Plc, a major player in the downstream oil and gas sector, has reported a 93.3 percent decline in its after-tax profit, thereby triggering a decline in the company’s share price to N234.5 as of June 23, year-to-date.
The oil and gas firm, in its unaudited 2025 first-quarter results, disclosed that its after-tax profit fell to N292 million from N4.34 billion in the same period of 2024.
The company’s performance was adversely affected by a 12.8 percent drop in revenue, which fell to N79.3 billion from N90.9 billion. A major contributor to this was a 14.8 percent decline in the sales of white products, which slid to N75.7 billion during the period under review.
Conoil, known for its sale of regulated gasoline, diesel, kerosene, aviation fuel, and its lubricant brand “Quatro,” cited lower product demand and surging finance costs as key contributors to the profit decline.
Finance costs soared by 134 percent to N2.29 billion in Q1 2025, up from N982 million in Q1 2024, driven by increased borrowings amid a high-interest rate environment.
This year, the Central Bank of Nigeria has retained its benchmark interest rate, the Monetary Policy Rate (MPR), at 27.5 percent for the second consecutive time. The decision reflects a cautious stance by the apex bank, citing emerging signs of macroeconomic stability and growing investor confidence.
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This is evident as companies like Conoil’s operational expenses, which consist of administrative and distribution costs, fell to N2.65 billion from N2.75 billion during the period.
Also, the cost of producing and refining these products fell to N73.9 billion from N81.6 billion as the company cut down on its purchases, reflecting the economic recovery.
Despite the profit setback, Conoil’s balance sheet showed signs of resilience. Total assets rose 18.8 percent from N114.95 billion in December 2024 to N136.55 billion by March 2025. The growth was largely driven by a 35.5 percent increase in inventories, which climbed from N29.25 billion to N39.66 billion, signaling strategic stockpiling for anticipated demand recovery.
Trade and other receivables also expanded significantly, rising 15.9 percent to N83.37 billion, reinforcing the strategy to drive sales through extended credit terms.
On the equity side, retained earnings rose slightly to N35.61 billion, and shareholders’ funds increased by 6.1 percent year-on-year to N39.78 billion. This points to sustained capital accumulation despite weaker earnings.
The cash flow from operating activities was negative at N11.56 billion, a reversal from the N8.8 billion generated in the same period last year. This was driven by a N10.41 billion outflow for inventory buildup and N11.57 billion tied up in receivables. The company noted that this was a deliberate move to invest in stock and extend credit to sustain market presence.
Cash and cash equivalents deteriorated further to a net negative position of N35.26 billion, from N21.41 billion at the start of the year.
