Aradel Holdings Plc is riding on a wave of acquisitions to deliver record profit despite weaker oil prices, higher costs and margin pressure across its core operations.
The Lagos-listed integrated energy company’s net profit rose 55 percent to N401.2 billion from N259.1 billion a year earlier, while revenue increased 20 percent to N697.3 billion, according to its earnings release on Wednesday on the Nigerian Exchange.
The strong bottom-line performance was driven largely by deal-related income and a sharp rise in contributions from investments, following a year of aggressive portfolio expansion.
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Share of profit from associates climbed 523 percent to N197 billion, reflecting higher earnings from ND Western Limited and Renaissance Africa Energy Company.
Aradel also recorded a provisional N201 billion bargain purchase gain after completing the acquisition of an additional 40 percent equity stake in ND Western on 31 December, lifting its effective ownership to 81.7 percent.
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Adegbite Falade, the chief executive officer of Aradel said the results underscored the benefits of Aradel’s diversification strategy.
“The significant growth in profitability reflects the quality of our asset base, disciplined execution and the inherent resilience of our diversified energy portfolio,” he said.
The company noted that the full impact of the ND Western acquisition would be reflected in subsequent reporting periods.
Beneath the headline profit growth, operating performance was more subdued. Operating profit fell 7 percent to N272 billion, while gross profit declined 21 percent to N280 billion, as gross margin compressed to 40 percent from 61 percent in 2024.
The decline reflected lower realised prices and higher operating costs linked to increased activity and regulatory obligations.
Average realised crude oil prices fell 15 percent to $70.3 per barrel, while realised gas and refined product prices also declined.
Aradel said it booked N34.7 billion in stock adjustment expenses related to crude oil overlifts, compared with a credit a year earlier, alongside a one-off N25.5 billion provision for price-based royalties pending resolution of the computation mechanism.
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Staff costs rose 85 percent to N94.8 billion, driven largely by long-term incentive plan payments. The company described some of the cost pressures as non-recurring, adding that the stock adjustment is expected to reverse by the first quarter of 2026.
Operational volumes, however, strengthened across the portfolio. Crude oil lifted rose 35 percent to 4.1 million barrels, supported by improved well optimisation and operational efficiency.
Gas sales increased 62 percent to 18.5 billion cubic feet, while refined product volumes climbed 26 percent to 302.9 million litres as refinery uptime improved and capacity utilisation rose to 49 percent.
The company also recorded its highest-ever gas production rate of about 83.8 million standard cubic feet per day, following completion of a gas revamp and expansion project.
The balance sheet expanded sharply following the consolidation of ND Western and Renaissance. Total assets jumped to N10.4 trillion from N1.7 trillion a year earlier, reflecting the addition of upstream assets and associated infrastructure.
Cash and bank balances more than tripled to N1.47 trillion, partly boosted by cash acquired through business combinations.
That expansion came with heavy cash outflows. Net cash used in investing activities surged to N605.9 billion, driven by acquisitions and higher capital expenditure, including N430.6 billion invested in ND Western.
Operating cash flow declined 33 percent to N209.7 billion, weighed down by tax settlements and delayed receivables, though the company said outstanding proceeds are expected in early 2026.
Looking ahead, Falade said the company’s focus has shifted from acquisitions to integration and optimisation. “Our priority now is consolidating our expanded portfolio to enhance operational scale, improve efficiency and increase production,” he said, adding that that is expected to deliver long-term shareholder value.
Investors are piling in as Aradel’s shares have gained 22.4 percent since the beginning of this year, closing trading on Tuesday, February 3 at N820 at the local bourse.
