Aradel's half-year profit grows far less than revenue as galloping costs bite

Aradel Holdings reported a dramatic increase in revenue for the first half of 2026, reaching ₦2.5 trillion, a nearly sevenfold rise from ₦368.1 billion. This surge is largely attributed to global oil price volatility, exacerbated by the US-Israeli War against Iran, which has disrupted supply chains and created a "bonanza" for energy companies.

However, the company's earnings did not keep pace with its revenue growth. After-tax profit climbed to ₦191 billion from ₦146.4 billion, a modest increase that was significantly eroded by exploding costs. Finance costs, in particular, ballooned to ₦326.1 billion from ₦11.1 billion, and tax spending surged by 1,150.4% to ₦561.7 billion, heavily impacting the bottom line.

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A firmer price environment supported performance, generating net cash from operating activities of ₦975.6 billion and a closing cash balance of ₦1,716.6 billion.

The company's performance was heavily reliant on crude oil exports, which constituted 77.8% of its revenue during the period. Aradel saw a substantial increase in production, with average daily oil output jumping by 258% and gas output soaring by 1,121%. Its refining business also contributed, generating ₦129.5 billion from refined product sales.

Despite the challenges in translating revenue into profit, Aradel's CEO Adegbite Falade highlighted a "firmer price environment" that supported performance, leading to net cash from operating activities of ₦975.6 billion. This strong cash flow facilitated a significant reduction in net debt to ₦46.5 billion from ₦475.1 billion in the prior year.

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This drove the reduction in net debt to ₦46.5 billion at year’s end, from ₦475.1 billion in the prior year.