Oando’s financial strain deepens despite paper profit

Oando Plc’s balance-sheet pressures deepened in 2025, with the Nigerian energy group sinking further into negative equity and facing mounting liquidity strain, even as it reported a headline profit largely driven by debt forgiveness and accounting reversals rather than operational performance.

The company’s unaudited results for the year ended December 31 show a group equity deficit of ₦553.8 billion, widening sharply from ₦361 billion at the beginning of the year.

The deterioration underscores the fragility of Oando’s capital position as it advances plans to exit public markets through a proposed delisting from the Nigerian Exchange and Johannesburg Stock Exchange.

Revenue for the year fell 21% to ₦3.21 trillion, reflecting a steep slowdown in the Supply & Trading division, which remains the group’s largest business. Sales from the unit declined by ₦965 billion, dragging overall turnover lower despite stronger output from upstream operations.

While the Exploration & Production segment posted a 23.5% increase in revenue to ₦480 billion, it was insufficient to offset pressures elsewhere. Group gross profit collapsed to ₦27.8 billion, down from ₦155.9 billion a year earlier, as high costs eroded margins amid shrinking trade volumes.

Making Profit

Despite these operational setbacks, Oando reported a total comprehensive profit of ₦178.6 billion, reversing an ₦83 billion loss in 2024. The turnaround, however, was overwhelmingly driven by non-operational gains.

The company booked a ₦573 billion reversal of impairment on financial assets, compared with an impairment charge in the prior year.

In addition, finance income surged to ₦381 billion, largely reflecting gains from debt restructuring, including a Deed of Release and debt forgiveness arrangements that allowed Oando to derecognise substantial liabilities.

Behind the accounting gains, pressure on liquidity continued to build. Total liabilities rose to ₦7.26 trillion, with current borrowings of ₦1.3 trillion highlighting short-term funding stress. Trade and other payables climbed to ₦2.95 trillion, pointing to stretched working capital and reliance on creditor support.

The company said it remains focused on its ongoing restructuring and proposed Scheme of Arrangement, which includes buying out minority shareholders, reducing share premium and redistributing treasury shares as part of preparations to become a private entity.