Onome Amuge
Conoil Plc, the downstream oil marketer chaired by billionaire Mike Adenuga, has reported its weakest profit in five years, as a mix of slumping sales, high-interest borrowing, and looming market disruption battered its bottom line in the first half of 2025.
According to unaudited financial results filed with the Nigerian Exchange, Conoil’s net income for the six months to June 30 fell 89 per cent to N900 million, down from N8.02 billion in the same period a year earlier. The sharp contraction translated to N1.30 in earnings per share, a drop from N11.56.
The downturn was primarily driven by a 20.4 per cent year-on-year drop in revenue, which fell to N143.65 billion. The company attributed the softer top line to weaker sales volumes across its core white products segment, a category that includes petrol, diesel, and aviation fuel and accounts for more than 96 per cent of its revenue.
While a corresponding drop in the cost of sales partially cushioned the blow, gross profit still fell 35 per cent. The company’s financial health was then severely compromised by a more than doubling of finance costs, which soared to N4.76 billion from N2.22 billion in the first half of 2024. This increase came despite a decline in total borrowings and highlights the impact of Nigeria’s high-interest-rate environment on Conoil’s overdraft-heavy funding structure. Interest payments alone wiped out 42 per cent of the company’s gross profit.
On the balance sheet, Conoil posted positive cash flow from operations, driven by drawing down inventory. However, its trade receivables (the money owed to the company by customers) rose by 24 per cent to N89 billion. This raises critical questions about the company’s working capital discipline and its ability to manage credit sales in an inflationary and liquidity-constrained economy.
The results point to a company facing both internal and external pressures. Conoil’s long-standing reliance on white products makes it particularly vulnerable to pricing competition and regulatory shifts, while its lack of diversification into higher-margin segments like lubricants or liquefied petroleum gas (LPG) has weighed on its earnings resilience.
With the new Dangote Refinery now operational and actively reshaping the Nigerian downstream landscape, Conoil faces an even tougher competitive environment. The new mega-refinery is reportedly producing enough petrol to meet domestic demand, with plans for direct distribution that could challenge traditional marketers. This new market dynamic, coupled with pricing battles and the pressure to maintain market share, signals a difficult road ahead for established players.
Investor confidence in Conoil’s near-term outlook appears to have waned, with the company’s shares having fallen 39.4 per cent year-to-date on the Nigerian Exchange, reflecting the market’s unease with the financial results and the challenges on the horizon.
