Caverton Offshore Support Group Plc has reported a pre-tax loss of N8.66 billion for the six months ended June 30, 2026. This represents a sharp reversal from the pre-tax profit of N2.07 billion recorded in the corresponding period of 2025.

The company also posted a net loss of N8.69 billion for the period, compared to a net profit of N2.04 billion in H1 2025. The downturn was primarily driven by rising administrative expenses and high finance costs, which overshadowed the revenues generated from its core aviation and marine support operations. Consequently, earnings per share fell to a loss of N2.59, down from a positive N0.61 in the previous year.

Revenue Decline and Cost Pressures

Caverton's total revenue declined by 11% to N14.68 billion, down from N16.47 billion in H1 2025. While helicopter maintenance generated N4.27 billion and helicopter/airplane contracts contributed N4.36 billion, vessel agency services brought in N3.28 billion. However, helicopter charter revenue fell significantly to N1.01 billion from N3.51 billion, dragging down the overall top-line performance.

Although operating expenses rose modestly by 3% to N7.35 billion, gross profit dropped 22% to N7.33 billion due to the lower revenue base. Key operating cost drivers included crew salaries, consumables at N2.27 billion, vessel charter hire expenses at N998.0 million, and various aircraft-related operating expenses.

The most severe pressure on earnings came from administrative expenses, which surged to N7.90 billion from N4.74 billion a year earlier. This increase was heavily driven by depreciation expenses, which jumped to N5.37 billion from N1.21 billion. Additionally, employee benefit expenses rose to N563.22 million, pushing the company into an operating loss of N283.09 million, compared to an operating profit of N11.57 billion in H1 2025.

Finance costs remained a heavy drag on the company's bottom line. Net finance costs stood at N8.37 billion, slightly lower than the N9.50 billion recorded in H1 2025, as interest expenses on borrowings and lease obligations continued to consume operating cash flow.

Balance Sheet and Debt Profile

As of June 30, 2026, Caverton's total assets grew slightly by 3% to N122.04 billion, up from N118.63 billion at the end of December 2025, supported by trade receivables and N6.08 billion in contract assets. However, liquidity weakened significantly as cash and bank balances fell by 50% to N1.68 billion, down from N3.37 billion in December 2025.

The company's reliance on debt financing increased, with interest-bearing loans and borrowings rising 17% to N77.07 billion from N65.79 billion. Persistent losses have also left shareholders' funds in negative territory at N15.50 billion, indicating that accumulated losses continue to exceed the company's equity base.

Market Reaction and Historical Context

Investors reacted to the weak financial performance, with Caverton's share price closing at N5.50 on Tuesday, August 4, 2026. This price represents a 34.91% year-to-date decline compared to the N8.45 it traded at on January 14, 2026.

This H1 performance follows a challenging full-year 2025, where Caverton reported a pre-tax loss of N13.87 billion. While that represented a 74.15% reduction from the N53.67 billion loss recorded in 2024, revenues had also declined by 40% to N24.1 billion in 2025 from N40.2 billion in 2024. Although the group achieved an operating profit in 2025 through foreign exchange gains, liability settlements, lease-related gains, and asset disposals, the operational pressures have intensified in 2026.