Oando PLC has reported a remarkable profit of ₦113.06 billion for the first quarter ended March 31, 2025, almost double the ₦59.35 billion in the same period of 2024. The rebound in earnings of the oil and gas giant is set against the backdrop of a rough mix of higher financing cost, administrative expenses, and volatility in operating income.
This Q1 performance demonstrates Oando’s enduring resilience and ability to ride out sector and macroeconomic headwinds on the strength of a mix of recoveries in financial assets and growing finance income.
Revenue Remains Robust, Gross Profit Soars
Group revenue during Q1 2025 was ₦932.57 billion, up modestly from ₦915.42 billion in Q1 2024, reflecting steady performance under contracts with customers. However, the company posted a massive rise in gross profit to ₦85.43 billion, nearly double the ₦31.41 billion last year. This came despite a drop in cost of sales to ₦847.15 billion from ₦884.01 billion.
Operating Income Turns into Loss, But Impairment Reversal saves the Quarter
Despite the strong gross margin, Oando posted an operating loss of ₦120.34 billion, reversing to an ₦117.20 billion operating profit in Q1 2024. The principal culprits: a staggering ₦301.90 billion in operating losses (assuming foreign exchange or asset revaluation effects), and ₦86.15 billion in administration costs.
But reversal of impairment in financial assets worth ₦182.29 billion was a welcome relief. The reversal contrasts with the ₦3.37 billion impairment cost that was recorded a year ago and played a crucial role in trimming the bottom line.
Finance Income Minimizes the Pain of Debt Costs
Oando’s net finance income was ₦67.78 billion, a surprise rebound from a Q1 2024 net finance cost of ₦46.86 billion. Finance costs rose to ₦81.82 billion from ₦55.08 billion, reflecting Oando’s high debt levels and possibly rising interest rates, but the company made ₦149.60 billion in finance income, likely from foreign exchange gains or investment income.
This swing helped sharply to reverse the decline in pre-tax profit, while core operating performance lagged behind.
Tax Credit Adds to Bottom Line
The biggest contributor to the Q1 profit of Oando was potentially a massive ₦165.62 billion tax credit, compared with an ₦11.00 billion tax charge in the prior period. Although there was no detail of the nature of the tax credit within the unaudited report, such a reversal would usually be due to recognition or remeasurement of a deferred tax asset owing to currency or policy movement.
Without this tax gain, Oando would have reported a pre-tax loss of ₦52.56 billion, highlighting the role that non-operational levers played in ensuring profitability for the company.
Corporate Segment Still in the Red
At the standalone company level, Oando PLC (excluding subsidiaries) incurred a net loss of ₦28.94 billion in Q1 2025, up considerably from last year’s same period loss of ₦210.94 billion. The company did not incur direct revenue, but had ₦421.98 billion in other operating income, which was offset by ₦432.77 billion in asset impairments and ₦4.76 billion in administrative expenses.
The solo show emphasizes that the bulk of the group’s power lies in its upstream subsidiaries, spearheaded by Oando Energy Resources.
