Oando slashes H1 pre-tax loss by 77% as Q2 swings to profit

Oando Plc has cut its H1 2026 pre-tax loss by 77.47% to N32.84 billion, helped by a swing to profit in the second quarter. The energy group posted a pre-tax profit of N44.53 billion in Q2 2026, against a loss of N77.37 billion in Q1 2026 and a loss of N93.18 billion in Q2 2025.

Revenue rose 19.92% year on year to N2.06 trillion, while operating profit came in at N127.84 billion, compared with an operating loss of N158.71 billion in H1 2025. Profit after tax climbed 8.28% to N68.56 billion, and earnings per share rose 60% to N8.00.

What drove the numbers

Oando’s revenue growth was driven by both its Supply and Trading and Exploration and Production businesses. Supply and Trading remained the dominant revenue source, generating N1.72 trillion, or 83.24% of external revenue. Exploration and Production contributed N344.23 billion, representing 16.68% of group revenue.

But the revenue concentration in Supply and Trading explains the thin margins. The segment recorded operating profit of only N8.82 billion, an operating margin of 0.51%. That means the segment kept about 51 kobo in operating profit for every N100 of external revenue generated.

Cost of sales rose 15.61% to N1.96 trillion from N1.70 trillion, slower than revenue growth, lifting gross profit to N101.19 billion. The gross profit margin improved to 4.90% from 1.36% in H1 2025. Q2 showed better momentum, with gross margin at 6.59%.

The operating profit margin was higher than the gross profit margin, driven by other operating income and a net impairment reversal. Other operating income hit N48.52 billion, compared with other operating losses of N298.29 billion in H1 2025. A net impairment reversal of N55.92 billion was also recognised, though lower than the N197.52 billion recorded in the prior year. Combined, these items contributed N104.44 billion, equivalent to about 81.70% of operating profit.

Finance costs still pressure bottom line

Finance costs declined 13.67% to N167.58 billion from N194.12 billion. However, finance income fell sharply to N6.28 billion from N158.99 billion. The group’s net finance position swung from net finance income of N12.97 billion to a net finance cost of N161.30 billion, equal to 126.17% of operating profit.

That means Oando’s entire operating profit was absorbed before tax. The group therefore moved from an operating profit of N127.84 billion to a pre-tax loss of N32.84 billion, although the loss was much lower than the N145.74 billion recorded in H1 2025.

Balance sheet and liquidity

Total assets stood at N7.89 trillion. Cash and cash equivalents rose 23.88% to N544.92 billion, and the current ratio improved to 0.54 times from 0.44 times. But receivables grew faster than revenue, up 23.85% versus 19.92%. With N2.71 trillion, or 34.33% of total assets, held in receivables and contract assets, Oando’s liquidity depends heavily on timely collections.

Current liabilities of N6.57 trillion remain substantially above current assets of N3.54 trillion, leaving a working-capital deficit of about N3.03 trillion. Total borrowings were broadly unchanged at N2.70 trillion after current borrowings declined by N346.12 billion and non-current borrowings increased by N352.39 billion.

Oando remains in negative equity. Total liabilities of N8.42 trillion exceeded total assets of N7.89 trillion, resulting in negative equity of N530.45 billion, improving from negative N566.97 billion at December 2025.

Market reaction

Oando’s share price closed July 2026 at N36.60, a month-to-date decline of 8.39% and a year-to-date decline of 8.96%. The stock closed May at N51.00, when it was up 26.87% year to date. It fell 21.67% to N39.95 in June, then dropped another 8.39% in July.

For Nigerian investors, the H1 result shows Oando’s recovery is real but still fragile. Heavy finance costs, thin margins and a large working capital gap mean the group’s earnings remain sensitive to borrowing costs and customer collections.