Aradel Reports ₦321.6bn Pre-Tax Profit, Up 187% Year-on-Year

Aradel Holdings Plc has posted a profit before tax of N321.6 billion for the year ended December 31, 2024, representing a 187 percent increase from the previous year.

The company’s latest unaudited financial statements reveal that revenue surged by 162.74 percent, reaching N581.022 billion, a significant jump from the N221.142 billion recorded in 2023. This growth was largely driven by a 244.6 percent increase in export crude oil revenue, a 174.7 percent rise in gas revenue, and a 74.9 percent boost in refined products revenue.

The company also saw a substantial improvement in key financial metrics. Gross profit rose to N319.809 billion, marking a 124.69 percent increase year-on-year, while operating profit climbed by 160.81 percent to N297.474 billion. Profit after tax surged by 361.10 percent to N247.786 billion, with earnings per share growing at a similar rate to N57.03. Aradel’s balance sheet also strengthened significantly, with total assets rising by 88.96 percent to N1.745 trillion, and total equity nearly doubling to N1.393 trillion.

Speaking on the company’s performance, Aradel’s Chief Executive Officer (CEO), Mr. Adegbite Falade, attributed the exceptional results to a combination of operational efficiency and strategic expansion. According to him, the company recorded higher hydrocarbon production, particularly following the successful re-entry of Well 2ST in the Omerelu Field, which led to the attainment of First Oil on May 31, 2024. Additionally, increased sales volumes from its refinery operations contributed to the strong financial performance.

Aradel’s profitability was bolstered by higher production volumes, stronger realised prices, and a write-back in asset retirement obligation (ARO) liability provisions following a reassessment of obligations. Free cash flow increased by 98 percent year-on-year, reaching N178.5 billion, highlighting the company’s strong internal funding position. This financial flexibility allows Aradel to invest in growth initiatives, expand its refinery operations, and pursue acquisitions without excessive reliance on external borrowing.

Despite the company’s revenue expansion, rising costs put pressure on margins. The gross profit margin declined slightly from 56.5 percent in 2023 to 55.0 percent in 2024, as the cost of sales surged by 231.45 percent, outpacing revenue growth. This was attributed to an increase in crude handling charges, depreciation, royalties, and other statutory expenses. Similarly, operating profit margin fell from 51.8 percent to 51.2 percent, impacted by a 164.37 percent rise in general and administrative expenses, alongside higher sales and marketing costs.

Aradel’s landmark year was capped by its successful percent listing on the Nigerian Exchange (NGX) in October 2024, a move that Mr.  Falade described as a “significant milestone towards fulfilling our promise to enhance shareholder value.” However, despite its strong financial performance, the company’s stock price declined by 14.9 percent year-to-date by the end of 2024. Market sentiment has improved in early 2025, bringing the year-to-date loss down to 9.7 percent as of January 28, 2025. The company also declared an N8 per share interim dividend, offering a 1.48 percent dividend yield to investors.

Looking ahead to 2025, Aradel plans to commence development projects for Olo, Olo West, and Omerelu Fields while optimising production from Ogbele. The company is targeting an annual production capacity of 16,000 barrels per day and 50 million standard cubic feet of gas per day. With its strong financial performance, rising free cash flow, and strategic expansion plans, Aradel remains well-positioned for long-term growth. While cost pressures remain a factor, the company’s ability to sustain earnings growth and reinvest in key projects could drive continued value for shareholders.