Oando Plc delivered a mixed financial performance for the 2025 financial year, posting stronger oil and gas production but weaker earnings as declining revenue, rising finance costs and a negative equity position weighed on its bottom line.
The company's audited full-year financial statements, filed with the Nigerian Exchange (NGX) on Monday, July 6, 2026, show that while production expanded significantly following the integration of the Nigerian Agip Oil Company (NAOC) Joint Venture assets, profitability came under pressure due to softer revenues and shrinking operating income.
Pre-tax profit declined sharply by 64.6 percent to N135.76 billion in 2025 from N383.27 billion recorded in the previous year. Revenue also fell by 22.2 percent to N3.18 trillion, compared with N4.09 trillion in FY2024.
The company also reported a negative working capital position of N3.76 trillion, highlighting continued liquidity pressures despite growth in production and asset base.
CEO describes 2025 as a milestone year
Despite the weaker financial performance, Oando's Group Chief Executive, Wale Tinubu, maintained that 2025 represented a defining period for the company following the successful acquisition and integration of the NAOC Joint Venture assets.
"FY 2025 marked our first full year of operational execution following the acquisition of the NAOC Joint Venture assets and represents an important milestone in Oando's evolution," Tinubu said.
"Having successfully completed the integration phase, our focus shifted to operatorship, operational excellence, and value realisation across the enlarged portfolio."
Speaking on operational achievements during the year, he highlighted the successful completion of the Obiafu-44 well.
"It demonstrates that indigenous operators can safely, efficiently, and responsibly execute complex development programmes at scale while creating long-term value."
Revenue weakens as gross profit turns into loss
A major feature of Oando's 2025 financial performance was the deterioration in its core operating business.
Revenue declined to N3.18 trillion, while the cost of sales stood slightly higher at N3.18 trillion, pushing the company from a gross profit of N93.34 billion in 2024 to a gross loss of N2.76 billion in 2025.
The decline suggests that the company's direct operating costs effectively wiped out revenue generated during the year before other income and accounting adjustments were recognised.
Other operating income also dropped sharply by 81.5 percent to N203.79 billion, down from N1.10 trillion recorded a year earlier.
Operating profit consequently fell by 57.7 percent to N240.96 billion, even though administrative expenses reduced to N399.25 billion from N548.31 billion in FY2024.
Finance costs remain a major burden
Finance expenses continued to pressure earnings during the year.
Finance costs rose by 67.4 percent to N394.69 billion, reflecting increased borrowing costs and a heavier debt burden.
However, finance income surged more than fivefold to N288.03 billion, compared with N47.20 billion recorded in 2024. This helped reduce net finance costs to N106.66 billion, an improvement from N188.64 billion in the previous year.
Even with that improvement, the reduction in finance costs was insufficient to offset weaker operating earnings, leading to the steep decline in pre-tax profit.
Interestingly, profit after tax fell by a much smaller margin of 7 percent to N204.81 billion, largely because the company benefited from an income tax credit of N69.05 billion, compared with a tax expense of N163.70 billion recorded in 2024.
Earnings per share also improved slightly to 23 kobo, from 18 kobo a year earlier.
Oil production records strong growth
Operationally, Oando delivered one of its strongest production performances in recent years.
Average group production increased by 32 percent year-on-year to 32,482 barrels of oil equivalent per day (boepd).
The increase was driven by stronger crude oil, natural gas and natural gas liquids output, supported by the first full-year consolidation of the NAOC Joint Venture assets following the acquisition of the former Nigerian Agip Oil Company business.
However, not all producing assets recorded growth.
Production at OML 56 Ebendo averaged 2,379 boepd, down from 2,825 boepd, after operations were temporarily shut in between February and April 2025 while awaiting regulatory approval.
Similarly, OML 13 Qua Ibo produced an average of 370 barrels of oil per day, compared with 411 barrels per day in 2024 due to natural field decline. Oando disclosed that a new development well is scheduled for early 2026.
The company also invested $36.9 million in capital expenditure during the year, targeting field development, infrastructure upgrades and exploration activities.
Assets grow but liabilities continue to outpace equity
Oando's balance sheet expanded during the year as total assets increased to N7.45 trillion.
The growth was supported by higher current assets, particularly trade and other receivables, which rose significantly to N2.19 trillion from N750.26 billion.
Cash and cash equivalents also nearly doubled to N439.88 billion, strengthening the company's liquidity position.
However, liabilities continued to rise at a faster pace.
Total liabilities climbed to N8.01 trillion, compared with N6.80 trillion in 2024, driven mainly by trade and other payables of N4.08 trillion and current borrowings of N2.08 trillion.
As a result, the company remained in negative equity, with shareholders' funds deteriorating to negative N566.97 billion, from negative N360.98 billion a year earlier, indicating that liabilities continued to exceed total assets.
Key takeaways
Although Oando's post-tax profit remained above N200 billion, much of that performance was supported by the tax credit rather than stronger operating earnings.
The company's net profit margin improved modestly to 6.4 percent from 5.4 percent, while its pre-tax profit margin fell sharply to 4.3 percent, reflecting the combined impact of declining revenue and rising financing costs.
Nevertheless, the 32 percent increase in production provides a stronger operational platform heading into 2026, when the company is expected to benefit from a full year of earnings contribution from its expanded upstream asset portfolio, including the ND Western and NAOC Joint Venture acquisitions.
Market reaction
Oando's shares closed at N41.45 on Monday, July 6, representing a 1.5 percent gain from Friday's closing price of N40.85.
Despite the uptick, the stock remains below its May 25 peak of N54.90 and is only 3.11 percent above its opening price of N40.20 at the start of the year, placing it 84th on the Nigerian Exchange in terms of year-to-date performance.
Market participants are expected to react to the company's FY2025 financial results in subsequent trading sessions, as the earnings report was released after the close of trading.