Conoil Reports 12.45% Rise In Pre-Tax Profit In 2024  

Conoil Plc has reported a solid performance in 2024, with pre-tax profit rising by 12.45 percent to N13.806 billion, supported by a 60.45 percent surge in revenue to N323.123 billion.

The growth was primarily driven by the company’s white products, which contributed 96 percent of total revenue and grew by 62.42 percent year-over-year (YoY).

However, the heavy reliance on white products exposes Conoil to risks associated with oil price volatility, highlighting the need for diversification into lubricants or other non-fuel segments, which currently account for only two percent of revenue.

Despite the strong revenue growth, Conoil faced margin pressures as costs rose faster than income. The cost of sales increased by 62.33 percent YoY to N294.720 billion, outpacing revenue growth and causing the gross profit margin to decline by 10.72 percent to 8.79 percent.

Operating expenses also rose significantly, with sales and distribution costs up 80.63 percent and general/admin expenses up 27.54 percent.

Finance costs nearly doubled, increasing by 98.58 percent to N3.883 billion. As a result, pre-tax profit margins fell by 30 percent to 4.27 percent, while net profit margins declined by 28 percent to 3.52 percent.

These trends indicate that while Conoil is growing its top line, profitability is being squeezed by rising operational and financing costs.

On the balance sheet, Conoil demonstrated resilience, with total assets growing by 16.51 percent to N113.570 billion and total equity increasing by 27.04 percent to N42.107 billion. Retained earnings also rose by 30.93 percent to N37.935 billion, reflecting the company’s ability to reinvest profits for future growth. However, cash and cash equivalents declined by 38.51 percent to N6.964 billion, raising concerns about short-term liquidity despite an improved current ratio of 1.54.

In the market, Conoil’s share price delivered an impressive 361 percent year-to-date (YtD) return in 2024, following a 217 percent return in 2023, highlighting strong investor confidence. However, the stock has remained flat as of January 2025, suggesting that investors are awaiting new catalysts, such as earnings announcements or dividend declarations, before making further moves. With a trailing dividend yield of 0.90 percent and robust retained earnings, Conoil is expected to maintain its dividend payout for the 2024 financial year.

Conoil’s 2024 performance reflects strong revenue growth and profitability, driven by white product sales. However, rising costs and margin pressures highlight the need for cost management and diversification. The company’s solid balance sheet and retained earnings position it well for future growth, but investors should monitor cash flow and liquidity trends closely.