N209bn Tax Credit Saves Oando Plc From Half-Year Loss, Amid Soaring Costs, Negative Shareholders’ Fund,
Directors of energy giant- Oando Plc, on Thursday beat the deadline for the release of its unaudited result for the half-year ended June 30, 2025, which however came below investor expectations on the back of the drop in revenue and the inability to curtail operating cost and finance cost. As a result, the group reported an operating loss of N158.711bn, down from the previous profit of N121.931bn.
Oando, however managed to close with a profit after tax of N63.312bn, a marginal increase over the previous N62.648bn due to the income tax credit of N209.054bn indicating that the group is not yet out of the woods.
According to the result, the group reported a revenue of N1.72tr, down from N2.03tr in the corresponding period of last year. A breakdown showed that supply & trading business continued the lion’s share of N1.45tr, a drop from the previous N1.875tr; while exploration & production yielded N267.528bn, up from N152.379bn; just as corporate & other business contributed N2.521bn, down from N3.1bn. Cost of sales consuming a princely N1.661tr, an improvement over last half-year’s N1.948tr. Gross profit, therefore, dropped from N82.296bn to N59.209bn.
Other operating loss stood at N298.286bn, compared to N280.201bn last year, resulting from the N311.567bn fair value loss on modification of financial asset, the impact of which was blurred by the N19.344bn foreign exchange gain that dropped significantly from N280.293bn in the first half of last year. Reversal of impairment amounted to N197.522bn, against the previous impairment of N7.213bn, mostly the N200.499bn reversal of impairment on trade and other receivable. Administrative expenses dropped from N233.353bn to N117.156bn; leaving operating loss at N158.711bn, from an income of N121.931bn.
Finance cost amounted to N137.493bn, against N76.88=7bn, boosted by the N185.008bn paid on bank borrowings, compared to N76.347bn; this amount was reduced by the reversal of prior default interest worth N48.101bn. Unwinding of discount on provisions stood at N8.523bn, up from N16.92bn, bringing total finance cost to N146.016bn from N93.807bn.
Total Finance income amounted to N158.986bn from N17.393bn, lifted by the N128.668bn interest income on bank deposits, loans which grew from N1.220bn; while interest income on finance lease rose from N16.172bn to N30.318bn; resulting in net finance income of N12.969bn, compared to the previous N76.414bn costs.
Loss before income tax for the period stood at N145.741bn, from a profit of N45.517bn, with exploration & production recording a N168.388bn loss. An income tax credit of N209.054bn, compared to the previous tax of N17.131bn. Exploration & production also accounted for N214.508bn in tax credit. Consequently, profit After Tax stood at N63.312bn, from N62.648bn in previous half year.
The balance sheet also reflects insolvency, with total liabilities still outweighing total asset by N305.884bn, compared to the previous N360.979bn highlighting the need for a recapitalisation of the business by shareholders.
