Operations Did the Work This Time
The upstream business delivered the cleanest set of operating numbers Oando has reported in years. Crude production rose 12% to 12,193 barrels per day, gas output increased 13% to 28,689 barrels of oil equivalent per day and natural gas liquids grew 53% to 2,103 barrels per day. Crude liftings climbed 43% to 3.97 million barrels and total sales volumes rose 21% to 10.21 million barrels of oil equivalent.
Reliability explains much of the gross profit jump. Uptime of 96.1%, up from 85%, meant more of the installed base actually produced, and spreading a largely fixed field cost base across higher volumes cut unit operating costs by more than a fifth. Gross margin recovered to about 6.3% of revenue from barely 1.2% a year earlier, which is why a 9% revenue increase could produce a near sixfold rise in gross profit.
A Tax Credit Stands Between the Group and a Loss
Below the operating line, the picture reverses. The prior year period carried exceptional finance income, including interest related gains that did not repeat, and its absence turned a ₦159.7 billion operating profit into a ₦74.65 billion pre-tax loss. Cash generated from operations reached ₦285 billion and total borrowings fell to ₦2.16 trillion, 22% below the peak recorded at the end of 2024, so the business is funding itself better than the pre-tax line suggests. Even so, a bottom line that depends on a ₦181.1 billion tax credit is low quality earnings by any measure: without it, shareholders would be looking at a loss for a period in which the operating business performed strongly.
