An analyst’s blunt question has captured market unease around Conoil Plc’s 2025 numbers. Writing on LinkedIn, Nathaniel Disu summed up the puzzle facing investors: how a company that generated over ₦302 billion in revenue ended the year with barely ₦2 billion in profit.
At first glance, the topline looks robust. Conoil’s 2025 revenue climbed to about ₦301.7 billion, reflecting strong volumes and pricing in Nigeria’s deregulated downstream market. But the income statement reveals where the value leaked out.
Margins collapsed at the cost line. Cost of sales was absorbed at roughly ₦278.8 billion, leaving a gross profit of only ₦22.9 billion — a gross margin of about 7.6%. For a petroleum marketer operating in a volatile FX and logistics environment, that margin leaves little room for error.
Operating costs then did the damage. Distribution expenses (around ₦9.0 billion) and administrative expenses (about ₦10.2 billion) together consumed close to the entire gross profit. By the time finance costs (₦10.4 billion) were accounted for, profit before tax was squeezed to roughly ₦2.5 billion. After tax, profit for the year settled at about ₦2.0 billion, translating to earnings per share of roughly 290 kobo.
Comparison With 2024
The comparison with the prior year is stark. In 2024, Conoil delivered a much stronger bottom line (profit after tax of about ₦8.8 billion and EPS of ₦1.26), despite operating in a still-regulated fuel market. The swing underscores how deregulation, FX pressures, higher financing costs, and thinner pricing power have fundamentally altered downstream economics.
What the market is really judging. Disu’s critique goes beyond a single bad year. Investors are reading the numbers as evidence of structural pressure:
razor-thin gross margins in a high-revenue, high-cost business;
operating expenses that no longer flex down when margins tighten; and
finance costs that quickly erase what little operating profit remains.
That context also explains why Conoil’s fundamentals, in the analyst’s words, have been “declining” and why its exit from the NGX 30 index has sharpened scepticism. For equity holders, the issue is not revenue scale but earnings quality. A ₦302 billion turnover that converts into just ₦2 billion of profit signals a business model under strain.
Unless Conoil can materially lift gross margins, rein in operating costs, or rebalance its funding structure, the analyst’s question is likely to linger — and so will investor caution.
