Oando posts N32bn pre-tax loss as finance costs surge

Energy giant Oando PLC has announced a pre-tax loss of N32.84 billion for the first half of 2026, a result heavily influenced by soaring finance costs. Despite a robust recovery in its core operations and a 20% rise in revenue to N2.06 trillion, the company's bottom line was significantly hampered by elevated interest payments and debt servicing obligations.

The company's unaudited interim financial statements revealed that while revenue increased from N1.72 trillion in the same period last year, the cost of sales also climbed. However, gross profit saw a substantial jump to N101.19 billion from N23.48 billion. Supported by a rebound in other operating income and controlled administrative expenses, Oando achieved an operating profit of N127.84 billion, a stark reversal from the N158.71 billion operating loss recorded in the first half of 2025.

Despite these operational gains, Oando's significant leverage on its balance sheet proved to be a major constraint. Net finance expenses surged to N161.30 billion, driven by finance costs of N167.58 billion and a sharp decline in finance income. Group leadership acknowledged that "high interest expenses and net finance costs continue to absorb operating profit before taxation," even as core asset performance improved.

Interestingly, Oando's ultimate net profit for the six-month period expanded by 8% to N68.56 billion, compared to N63.31 billion in H1 2025. This increase was largely attributed to a significant tax credit of N101.40 billion. The company's performance comes amidst its aggressive expansion in Nigeria's upstream oil and gas sector, including the acquisition of Nigerian Agip Oil Company, which has boosted its production levels.

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while core asset performance and operational cash flows have improved significantly, high interest expenses and net finance costs continue to absorb operating profit before taxation.