Caverton posts N13.87 billion pre-tax loss in 2025 as revenue drops 40%

Caverton Offshore Support Group Plc has reported a pre-tax loss of N13.87 billion for the financial year ended December 31, 2025, narrowing its losses by 74.15% from the N53.67 billion loss recorded in 2024. Revenue declined sharply by 40% to N24.1 billion, down from N40.2 billion in the prior year, as weakness spread across most of the group's service lines.

Revenue slump across key segments

Flight contract revenue, the largest contributor, fell by 61.36% to N7.74 billion, accounting for 32.11% of group revenue. Helicopter charter revenue dipped by 6.82% to N7.60 billion, contributing 31.51%. Training services revenue dropped by 35.04% to N4.52 billion, while helicopter maintenance revenue declined by 19.03% to N2.73 billion. Boatbuilding and charter service income slipped by 5.65% to N1.42 billion, and agency service revenue fell by 40.64% to N101.79 million. Aviation related activities generated about 93.67% of revenue, leaving marine services with approximately 6.33%.

Gross profit improves but costs weigh

Despite the revenue decline, gross profit rose by 44.22% to N12.15 billion from N8.42 billion, as the cost of sales dropped sharply by 62.35% to N11.96 billion. Consumables fell to N1.48 billion from N11.03 billion, crew related employee expenses declined to N5.46 billion from N10.73 billion, and training certification expenses dropped to N532.64 million from N1.83 billion. The gross margin expanded to 50.39% from 20.96%. However, administrative expenses surged by 176.25% to N28.99 billion, driven by a N17.42 billion write-off of security deposits on leased aircraft after the group could not recover value following lease terminations. Administrative depreciation rose to N3.47 billion, and bank charges increased to N2.82 billion from N707.40 million.

Operating profit supported by one-off gains

The group moved from an operating loss of N30.96 billion in 2024 to an operating profit of N3.60 billion, supported by N13.00 billion in other gains. These included N7.68 billion in exchange gains, N3.35 billion from lease termination, N3.28 billion from liability settlements, and N1.29 billion in exchange gains on borrowings, partly offset by a N2.60 billion revaluation loss on Caverton Marine's assets. Other income rose to N6.33 billion from N1.54 billion, largely due to a N5.44 billion profit from the disposal of an asset previously held for sale. The group also recorded a N1.11 billion reversal of impairment on financial assets, compared with a N2.99 billion impairment loss in the prior year.

Finance costs push results back into loss

Total finance costs fell by 18.72% to N18.64 billion, as the group did not repeat the N12.19 billion exchange loss on borrowings reported in 2024. However, interest on debts and borrowings more than tripled to N15.82 billion from N5.22 billion, reflecting a higher debt burden. This kept the business in a pre-tax loss position after the operating profit line. Loss after tax narrowed by 74.22% to N13.89 billion from N53.86 billion, while loss per share improved to N4.11 from N16.00.

Balance sheet expands but liquidity remains tight

Total assets rose by 55.75% to N118.63 billion, driven by property, plant and equipment increasing to N73.78 billion from N19.02 billion following an asset revaluation. The N59.72 billion revaluation gain was recorded in other comprehensive income and equity, not operating profit. Borrowings climbed by 30.51% to N71.36 billion from N54.67 billion. Cash and bank balances improved to N3.37 billion from N447.86 million, a 653.16% jump. Total equity remained negative at N8.76 billion, compared with negative N54.61 billion in 2024. Liquidity stayed under pressure, with current assets of N35.92 billion falling short of current liabilities of N106.25 billion, producing net current liabilities of N70.33 billion. Current borrowings nearly doubled to N53.45 billion, though trade and other payables fell to N44.01 billion from N59.05 billion.

Market reaction

The stock has gained 2.78% year to date from its opening 2026 price of N5.40 and is up 13.27% month to date. At N5.55 per share, market capitalisation stood at N18.60 billion.

For Nigerian investors and the broader market, Caverton's results highlight how exchange rate gains and asset sales can mask underlying operational strain. The group's heavy reliance on aviation revenue, rising debt costs, and persistent negative equity suggest that without sustained revenue recovery, the path to profitability remains uncertain.