Oando Plc, one of Nigeria’s top oil and gas companies led by Nigerian oil mogul Wale Tinubu, reported a 47% decline in profit after tax to N106.5 billion ($78.65 million) in the first nine months of 2026, down from N201.3 billion ($149.14 million) recorded in the corresponding period of 2025.

The decline came despite stronger production, higher revenue, improved operating profitability and sustained cost optimization across its expanded asset base, as rising financing costs and lower finance income weighed on earnings.

Production growth and higher oil prices lift revenue

The Lagos-based energy group, listed on the Nigerian Exchange and Johannesburg Stock Exchange, recorded revenue of N2.78 trillion ($2.06 billion), representing a 9% increase from N2.54 trillion ($1.89 billion) a year earlier. Stronger exploration and production, higher crude oil liftings, improved realised prices, and increased natural gas and natural gas liquids sales drove growth.

Total E&P sales volumes increased 21% to 10.21 million barrels of oil equivalent (MMboe), from 8.45 MMboe a year earlier, while higher crude oil prices further supported earnings.

Average daily production rose 14% year-on-year to 42,985 barrels of oil equivalent per day (boepd), compared with 37,614 boepd in the corresponding period of 2025. Crude oil production increased 12% to 12,193 barrels per day, while gas production rose 13% to 28,689 boepd. Natural gas liquids production recorded the strongest growth, climbing 53% to 2,103 barrels per day.

Crude oil liftings increased 43% to 3.97 million barrels, while the average realised oil price rose 31% to 87.31 per barrel. This lifted crude oil revenue 84% to N401 billion ($297.53 million). Natural gas sales volumes increased 5% to 34.01 billion standard cubic feet, generating N103 billion ($76.42 million), while natural gas liquids revenue advanced 50% to N6 billion ($4.45 million). Trading remained the group’s largest revenue contributor, generating N2.22 trillion ($1.65 billion), up 1% year-on-year.

Operating profit rebounds despite earnings decline

Despite the decline in net profit, Oando recorded a significant turnaround in operating performance. Operating profit reached N159.7 billion ($118.49 million), reversing an operating loss of N109.7 billion ($81.39 million) recorded in the first nine months of 2025.

Gross profit surged 483% to N174.5 billion ($129.47 million), compared with N29.8 billion ($22.11 million) a year earlier, as stronger crude oil prices and higher sales volumes supported revenue growth ahead of production costs.

Adjusted EBITDA also returned to positive territory at N181.8 billion ($134.88 million), compared with a negative N194.1 billion ($144.01 million) in the corresponding period of 2025. The improvement reflected higher gross profit and other operating income, alongside the absence of a significant prior-year fair value loss on the modification of financial assets.

Administrative expenses, however, increased 21% to N157.9 billion ($117.15 million), from N130.4 billion ($96.75 million), largely reflecting a 60% increase in professional fees to N79 billion ($57.8 million). The higher expenses were primarily associated with advisory costs for the group’s debt restructuring and capital management programme.

Finance costs weigh on profit as earnings fall

The improvement in operating performance was insufficient to prevent a decline in bottom-line earnings. Oando recorded net finance costs of N235.2 billion ($174.51 million), compared with net finance income of N128 billion ($94.97 million) in the corresponding period of 2025.

Finance income fell sharply to N9 billion ($6.68 million), from N368.7 billion ($273.56 million), as the previous year benefited from non-recurring interest income of N321.1 billion ($238.25 million) on loan receivables and bank deposits and N47.6 billion ($35.32 million) on finance leases. Finance costs also increased slightly to N244.2 billion ($181.04 million), from N240.7 billion ($178.59 million), reflecting the continuing burden of acquisition-related borrowing.

Interest payments reached N143.9 billion ($106.77 million), equivalent to approximately 50% of the N285 billion ($211.46 million) generated from operations. Although the company recorded a tax credit of N181.1 billion ($134.37 million), broadly unchanged from N181.8 billion ($134.89 million) a year earlier, the swing from net finance income to finance costs more than offset its stronger operating performance. Earnings per share consequently declined 25% to N12, from N16 in the prior-year period.

Cash generation improves as borrowings decline

Oando recorded N285 billion ($211.46 million) in cash generated from operations, reversing an outflow of N339.2 billion ($251.68 million) in the corresponding period of 2025. Net cash generated from operating activities stood at N217.8 billion ($161.6 million), compared with N235 billion used in the prior-year period.

Oando closed September 2026 with cash and cash equivalents of N175.9 billion ($128.7 million), up 22% from N143.8 billion ($106.7 million) a year earlier. Capital expenditure increased 31% to N110.7 billion ($82.14 million), primarily supporting drilling activities across its operated OMLs 60–63.

Total borrowings declined 20% during the first nine months of 2026 to N2.16 trillion ($1.6 billion), from N2.7 trillion ($2 billion) at the end of December 2025. This represents a 22% reduction from the post-acquisition peak of N2.77 trillion ($2.06 billion) recorded at the end of 2024. Net debt fell to N1.99 trillion ($1.48 billion), reflecting continued repayments and improved liquidity.

Tinubu advances debt restructuring and production expansion

Under Wale Tinubu’s leadership, Oando is pursuing a capital management programme aimed at reducing acquisition-related debt, lowering financing costs and strengthening its balance sheet. The company plans to raise up to N500 billion through two equity tranches expected in the fourth quarter of 2026 and the first quarter of 2027. Its application for a N220 billion rights issue has been submitted to the Securities and Exchange Commission, while a proposed $300 million debt-to-equity conversion forms part of the restructuring strategy.

Oando is also progressing a multi-instrument issuance programme of up to $1.5 billion to refinance or restructure existing borrowings, extend debt maturities and reduce its interest burden. The company is targeting completion of its balance sheet transformation by the end of the first quarter of 2027.

Operationally, the group has narrowed its full-year 2026 production guidance to between 40,000 and 45,000 boepd and is progressing a seven-well development programme across OMLs 60–63. Beyond its core oil and gas operations, Oando is expanding its clean energy portfolio, with 11 additional electric buses delivered to Lagos, taking its fleet to 13, while advancing a planned PET recycling facility in Ogun State and mining projects in Bauchi, Kebbi and Southwest Nigeria.