KEY POINTS
- Conoil profit slump cuts earnings by 77 percent.
- Conoil profit slump driven by rising finance costs.
- The profit slump forces dividend suspension.
Conoil Plc reported its weakest earnings in years, underscoring mounting pressure in Nigeria’s fuel retail market as higher borrowing costs and volatile pump prices eroded margins.
The company’s unaudited results show profit after tax fell 77 percent to N2.01 billion in 2025, from N8.77 billion a year earlier. Earnings per share dropped to 290 kobo from 1,264 kobo, and the board proposed no dividend, compared with a 350 kobo payout in 2024.
Conoil profit slump comes as revenue declined 6.6 percent to N301.7 billion, reflecting softer fuel volumes amid price volatility and weaker consumer demand.
Conoil profit slump deepens on interest burden
Although cost of sales eased, gross profit fell to N22.9 billion from N26.4 billion, narrowing the buffer against operating and financing pressures. Profit before tax declined 77 percent to N2.53 billion.
Finance costs more than doubled to N10.4 billion as the company increased reliance on bank borrowing. Short-term loans rose 89 percent to N54.2 billion, pushing current liabilities to nearly N99 billion.
Distribution expenses declined, while administrative costs rose modestly, but these adjustments were insufficient to offset the surge in interest payments.
Cash flow showed that Conoil’s profits were down
The ability to make money fell drastically. Operating activities brought in N167 million, down from N8.8 billion a year earlier. This was because receivables and inventory took up cash. After capital expenditure and interest payments, Conoil ended the year with a net negative cash position of N41.2 billion, wider than the N21.4 billion recorded in 2024.
The company increased investment in property, plant and equipment to N7.2 billion, lifting non-current assets to N12.4 billion. Shareholders’ funds edged down 1.1 percent to N39.1 billion, while retained earnings fell following prior dividend payouts that exceeded current-year profit.
Management attributed the strain to the need to hold larger inventories and extend credit to sustain sales, a common feature in Nigeria’s deregulated downstream sector. Analysts say Conoil profit slump mirrors broader industry challenges, including exchange-rate volatility, tighter credit conditions and thinner margins. The company’s ability to stabilise cash flow and reduce short-term borrowing will be closely watched in coming quarters.
