Conoil Plc has released its unaudited financial statements for Q2 2025, showing a further slump in profitability.
The company reported a pre-tax profit of N775 million, marking an 83% year-on-year (YoY) decline from the N4.686 billion recorded in the same quarter of 2024.
This also represents the second consecutive quarterly decline in 2025, moderating half-year (H1) pre-tax profit to N1.147 billion, sharply down from N10.219 billion in H1 2024 an 89% drop.
Revenue drags from White Products
A key driver of this performance was the sharp decline in revenue, especially from its core white products segment. Q2 2025 revenue fell by 28% YoY to N64.39 billion, which was also 19% lower than Q1 2025.
As a result, H1 2025 revenue dipped by over 20% to N143.65 billion, from N180.67 billion in the same period last year.
Margins under pressure
The revenue decline filtered into profitability metrics:
- Gross profit declined by 27% to N6.046 billion, despite a 28% drop in the cost of sales to N58.34 billion.
- Operating costs remained elevated, rising from N2.3 billion in Q2 2024 to N2.799 billion in Q2 2025. This pushed H1 2025 operating expenses to N5.454 billion, further compressing profit margins.
- Consequently, operating profit fell to N3.247 billion, down from N5.9 billion in Q2 2024.
Finance costs and debt position
Finance costs surged by 99% YoY to N2.472 billion, driven primarily by interest on bank overdrafts. For H1 2025, total finance costs stood at N4.76 billion, eroding earnings.
However, Conoil made progress in reducing its debt burden, as total debt declined to N21.5 billion from N28.7 billion as of December 2024 indicating efforts to deleverage amidst high interest rates.
Balance sheet
Despite the pressure on income, the company’s balance sheet showed modest resilience:
- Total assets rose slightly to N117.56 billion, up from N114.95 billion in December 2024.
- Retained earnings also increased to N36.219 billion, up from N35.319 billion, suggesting some level of earnings retention.
Key Highlights (Q2 2025 vs Q2 2024):
- Revenue: N64.390 billion, -28.16% YoY
- Cost of Sales: N58.344 billion, -28.31% YoY
- Gross Profit: N6.046 billion, -26.69% YoY
- Finance Cost: N2.472 billion, +99.22% YoY
- Post-tax Profit: N608 million, -83.46% YoY
- Earnings per Share: N1.30, -75.47% YoY
- Total Assets: N117.563 billion, +2.27% YoY
Market reaction and Investor sentiment
As of market close on August 1, 2025, Conoil’s share price stood at N234.50, down from N387.20 at the start of the year — representing a N152.70 decline or a 39.4% year-to-date loss.
Overall, Conoil’s Q2 2025 performance highlights a company facing significant top-line and cost-side pressures.
With white product revenues falling, operating costs rising, and finance costs nearly doubling, the company’s profitability has taken a heavy blow.
Still, Conoil’s debt reduction, modest asset growth, and improved retained earnings show that management is taking steps to steady the ship. The quarter-on-quarter pre-tax profit rebound from Q1 to Q2 (from N372 million to N775 million) hints at a potential recovery path, though it remains fragile.
For now, the market appears to be pricing in future recovery or dividend strength, but sustained pressure on earnings could eventually test that optimism. Conoil will need a strong second-half performance to reassure investors that the worst is behind.