Oando Plc delivered a significantly improved financial performance in the first half of 2026, narrowing its pre-tax loss by 77.47% despite continued pressure from high finance costs and thin operating margins.
The energy group posted a pre-tax loss of N32.84 billion for the six months ended June 30, 2026, compared with a pre-tax loss of N145.74 billion recorded during the corresponding period of 2025. The improvement was largely supported by stronger revenue growth, higher gross profit, and a sharp turnaround in second-quarter earnings.
The second quarter marked a notable recovery for the company, with Oando reporting a pre-tax profit of N44.53 billion, reversing the N77.37 billion pre-tax loss posted in the first quarter of 2026. The result also represented a significant improvement from the N93.18 billion pre-tax loss recorded in the second quarter of 2025.
Revenue climbs as core businesses drive growth
Oando's revenue rose by 19.92% year-on-year to N2.06 trillion, up from N1.72 trillion recorded in the first half of 2025, reflecting stronger contributions from its Supply and Trading as well as Exploration and Production businesses.
The Supply and Trading segment remained the company's largest revenue contributor, generating N1.72 trillion, accounting for 83.24% of total external revenue. Meanwhile, the Exploration and Production business contributed N344.23 billion, representing 16.68% of group revenue.
Despite generating more than four-fifths of the group's revenue, the Supply and Trading business delivered an operating profit of just N8.82 billion, translating to an operating margin of only 0.51%. This means the segment retained roughly 51 kobo in operating profit for every N100 of revenue generated, highlighting the thin margins within the business.
Gross and operating profit record strong improvement
Cost of sales increased by 15.61% to N1.96 trillion from N1.70 trillion in the comparable period. However, because revenue expanded at a faster pace than costs, gross profit surged by 331% to N101.19 billion, compared with N23.48 billion in H1 2025.
As a result, gross profit margin improved significantly to 4.90%, up from 1.36% a year earlier. The second quarter also showed stronger profitability, with gross margin rising further to 6.59%.
Operating performance recorded an even stronger turnaround. Oando posted an operating profit of N127.84 billion, reversing the N158.71 billion operating loss reported in the first half of 2025.
The improvement was largely supported by other operating income of N48.52 billion, compared with other operating losses of N298.29 billion recorded a year earlier. In addition, the company recognised a net impairment reversal of N55.92 billion, although this was lower than the N197.52 billion reported during the same period in 2025.
Combined, other operating income and impairment reversals contributed N104.44 billion, representing approximately 81.70% of total operating profit, indicating that a significant portion of earnings came from non-core operating items rather than direct customer revenue.
Finance costs remain major drag on profitability
Although finance costs eased during the period, they continued to weigh heavily on the group's bottom line.
Finance costs declined by 13.67% to N167.58 billion, down from N194.12 billion in H1 2025. However, finance income dropped sharply to N6.28 billion from N158.99 billion, resulting in a dramatic shift from a net finance income of N12.97 billion in the previous year to a net finance cost of N161.30 billion.
The net finance cost amounted to 126.17% of operating profit, effectively wiping out the company's operating earnings before tax and pushing the group into a pre-tax loss position despite stronger operational performance.
Profit after tax and earnings per share improve
Despite the pre-tax loss, Oando reported a profit after tax of N68.56 billion, representing an 8.28% increase from N63.31 billion recorded in the first half of 2025.
Earnings per share also strengthened considerably, rising by 60% to N8.00, compared with N5.00 in the corresponding period last year.
Balance sheet shows stronger liquidity but negative equity persists
The group's balance sheet expanded to N7.89 trillion, representing a 5.95% increase from N7.45 trillion as of December 2025.
Cash and cash equivalents increased by 23.88% to N544.92 billion, while the current ratio improved from 0.44 times to 0.54 times, reflecting modest improvement in short-term liquidity.
However, receivables grew by 23.85%, outpacing revenue growth of 19.92%, suggesting that a larger portion of sales had yet to be converted into cash.
Receivables and contract assets stood at N2.71 trillion, accounting for 34.33% of total assets, underscoring the company's reliance on timely collections from customers and counterparties.
Current liabilities remained significantly higher than current assets, with current liabilities of N6.57 trillion compared to current assets of N3.54 trillion, leaving Oando with a working capital deficit of approximately N3.03 trillion.
The company's borrowing profile also changed during the period. Current borrowings declined by N346.12 billion, while non-current borrowings increased by N352.39 billion, leaving total borrowings broadly unchanged at N2.70 trillion.
Oando also remained in a negative equity position as total liabilities of N8.42 trillion continued to exceed total assets of N7.89 trillion, resulting in negative shareholders' equity of N530.45 billion, although this improved slightly from negative N566.97 billion recorded at the end of 2025.
Share price under pressure
Despite the improved financial performance, investor sentiment remained subdued.
Oando's share price closed July 2026 at N36.60, representing a month-to-date decline of 8.39% and a year-to-date loss of 8.96%.
The stock had closed May at N51.00, when it was up 26.87% year-to-date, before falling 21.67% to N39.95 in June and declining by a further 8.39% in July, reflecting continued market caution over the company's financial position despite improving operational results.