KEY POINTS
- Conoil’s 2025 profit plunged 77% to ₦2.01 billion, the lowest in five years, with no dividend proposed.
- Rising short-term debt and finance costs, combined with lower fuel sales, squeezed margins and cash flows.
- Net negative cash position nearly doubled to ₦41.2 billion, highlighting financial stress in Nigeria’s downstream oil sector.
Conoil Plc reported its weakest annual profit in five years for 2025, as falling fuel sales, high borrowing costs, and growing short-term debt weighed heavily on the company. Profit after tax fell by 77% to ₦2.01 billion, down from ₦8.77 billion in 2024.
Earnings per share dropped from 1,264 kobo to 290 kobo, and the board proposed no dividend, compared to 350 kobo last year.
Revenue slipped 6.6% to ₦301.7 billion due to softer fuel volumes and weak consumer demand.
Although the cost of sales also fell, gross profit fell to ₦22.9 billion, reducing the company’s ability to absorb operating and financing pressures.
Rising Finance Costs Hit Hard
Finance costs more than doubled to ₦10.4 billion, reflecting increased reliance on bank borrowings to fund working capital.
Short-term borrowings surged 89% to ₦54.2 billion, pushing current liabilities to nearly ₦99 billion. Profit before tax fell to ₦2.53 billion, despite modest administrative costs and lower distribution expenses.
Operating activities generated only ₦167 million in cash, down sharply from ₦8.8 billion in 2024. After capital spending and interest payments, Conoil ended the year with a net negative cash position of ₦41.2 billion, nearly double the 2024 figure.
Management attributed the squeeze to higher inventory holdings and extended credit to sustain sales, common issues in Nigeria’s downstream oil sector.
Shareholders’ funds fell slightly to ₦39.1 billion, while retained earnings dipped further. Net asset value per share decreased to ₦56.30.
Analysts say Conoil’s results reflect broader challenges in Nigeria’s fuel market, including deregulation, exchange-rate fluctuations, and tight credit conditions. Investors will be watching whether the company can stabilize cash flows and rebuild margins in 2026.
