Oando posts N32bn pre-tax loss as finance costs surge
August 7, 2026 1:13 am
By Jide Ajia
Energy giant Oando PLC has reported a loss before tax of N32.84bn for the half-year ended 30 June 2026, as elevated interest payments and heavy debt servicing obligations offset an impressive recovery in its core operational earnings.
According to the company’s unaudited interim financial statements submitted to the Nigerian Exchange Limited and endorsed by Group Chief Executive Jubril Tinubu and Group Chief Financial Officer Adeola Ogunsemi, top-line performance expanded 20 per cent. Revenue rose to N2.06tn from N1.72tn recorded in the corresponding period of 2025.
Despite the cost of sales climbing from N1.70tn to N1.96tn, gross profit jumped sharply to N101.19bn, up from N23.48bn in H1 2025.
Supported by a rebound in other operating income to N48.52bn and controlled administrative overheads, the indigenous energy firm delivered an operating profit of N127.84bn, staged as a complete reversal from the N158.71bn operating loss posted a year earlier.
However, the group’s significant balance sheet leverage severely constrained net earnings before taxes. Net finance expenses surged to N161.30bn, driven by finance costs of N167.58bn alongside a steep decline in finance income to N6.28bn from N158.99bn in H1 2025.
Commenting on the heavy drag of financing overheads on operational recovery, group leadership noted that “while core asset performance and operational cash flows have improved significantly, high interest expenses and net finance costs continue to absorb operating profit before taxation.”
Notwithstanding the pre-tax contraction, Oando’s ultimate net profit for the six months expanded eight per cent to N68.56bn, compared to N63.31bn in H1 2025, heavily buoyed by a tax credit of N101.40bn.
The performance comes against the backdrop of Oando’s aggressive portfolio expansion in Nigeria’s upstream oil and gas sector. Following its landmark $783m acquisition of the Nigerian Agip Oil Company from Italian energy major Eni, the group doubled its participating interests in Oil Mining Leases 60, 61, 62 and 63 to 40 per cent.
The acquisition added 24 producing fields, extensive pipeline networks and gas processing infrastructure to Oando’s asset base, driving average daily production up 16 per cent year-on-year to 42,789 barrels of oil equivalent per day in H1 2026.
Despite these operational gains from the enlarged asset base, balance sheet pressures remain acute. Total liabilities reached N8.42tn against total assets, leaving group net equity in a deficit position of N530.45bn.
External auditors previously highlighted material uncertainties surrounding the group’s capital structure, cautioning that long-term fiscal stability relies heavily on debt restructuring and revenue execution.
In their report to shareholders, auditors noted that the company continues to incur substantial financial obligations, stressing that “reversal of this is dependent on successful actions to raise capital to pay down the significant debt levels and through achievements of revenue forecasts”.
Outlining the group’s forward strategy on the NGX, management reiterated that “core asset optimisation remains the central pillar for long-term value creation.” Executive leadership affirmed that ongoing portfolio adjustments, continuous well-intervention campaigns and disciplined capital expenditure will remain prioritised to bring down overall debt exposure and strengthen working capital.
Jide, a seasoned journalist with over 12-year experience, reports business-related stories
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