For a company that has spent years fighting fires on multiple fronts, Oando PLC’s half-year results to June 2026 read like a sigh of relief. Revenue is growing again. The business is making an operating profit. Cash is flowing in, not out. After a long stretch of losses, FX shocks, and debt pressure, the oil and gas group finally looks like it is steering itself out of crisis. But a closer look at the numbers shows this is not a victory lap yet. The income statement may be healing, but the balance sheet is still in intensive care.
The headline growth was solid. Oando posted N2.06 trillion in revenue, up almost 20% from N1.72 trillion a year earlier. More telling was what happened below that line. Gross profit jumped more than four-fold to N101.2 billion, pushing gross margin from a thin 1.4% to 4.9%. That improvement came from tighter cost control as cost of sales grew slower than revenue, and from the absence of the huge one-off losses that distorted 2025. The real turning point was at operating level. Oando moved from an N158.7 billion operating loss to an N127.8 billion operating profit. Even after interest and tax, the group delivered N68.6 billion in profit after tax, up 8.3%, and earnings per share rose to N8 from N5. A large N101.4 billion tax credit helped, which means the bottom line is not yet entirely self-sustaining, but the direction is clear: the core business is now generating real value.
Behind that profit lies a deliberate effort to shrink and refocus the asset base. Property, plant and equipment dipped to N2.82 trillion as depreciation and disposals took effect. Intangible assets also fell. Yet this was not just decline. Oando raised N12.5 billion from selling property and equipment, booked N13.3 billion as deposit from a subsidiary sale, and collected N2.1 billion in insurance claims. At the same time, it spent N68.8 billion on new capex, so the asset base is being rotated rather than abandoned. The strategy appears to be clear out non-core holdings, keep spending on productive assets, and manage the long tail of legacy obligations. Those obligations are still heavy. Decommissioning provisions sit at N438.1 billion, a reminder that upstream oil operations carry liabilities that will demand cash for years to come.
The commercial side of the business also looks healthier. Higher revenue pushed receivables to N2.71 trillion, but unlike in the past, that did not trap cash. Operating activities generated N179.5 billion, a sharp reversal from the N287.9 billion outflow recorded in H1’25. Working capital released another N29.8 billion, and overall cash from operations came in at N110 billion. That is why cash on hand more than doubled to N544.9 billion and the bank overdraft disappeared. The trade-off, however, is visible in payables. Trade and other payables climbed 10.5% to N4.50 trillion and remain the biggest item on the liability side. Oando is essentially funding part of its growth by stretching supplier terms. It works for now and explains the improved liquidity, but it creates vulnerability. If creditors tighten terms, the cash cushion could evaporate quickly.
That brings us to the balance sheet, where the story is still fragile. Yes, the equity deficit narrowed to N530.4 billion from N567 billion, but it remains negative, weighed down by N350.4 billion in treasury shares and accumulated losses. Total borrowings are still N2.70 trillion, with N1.73 trillion due within a year. Current liabilities exceed current assets by over N3 trillion. In short, Oando has solved its immediate cash problem without yet solving its solvency problem. The N109.2 billion assets classified as held for sale and the ongoing disposal program are therefore not optional. They are central to the plan to raise funds, pay down debt, and restore equity. The financing section of the cashflow already shows this discipline at work, with net borrowing inflows dropping sharply as repayments picked up.
Cost discipline has been another driver of the recovery. Administrative expenses fell, interest paid dropped by nearly N29 billion, and finance costs declined 13.7% to N167.6 billion. The huge impairment and other operating losses that dragged 2025 into the red did not repeat. Instead, Oando booked N55.9 billion in impairment reversals. These are signs of a leaner operation, but they also highlight how thin the margins still are. With cost of sales at 95.1% of revenue, there is very little room for error. A spike in crude prices, hedging premiums, or diesel costs can quickly erase the gains.
The risks ahead are therefore not about demand. They are about structure. Foreign exchange volatility took a toll, with N31.8 billion in translation losses and another N18.6 billion lost on cash balances. In an oil business that earns in dollars and spends in naira, that exposure is hard to avoid. Interest rate risk is just as real. Even with lower interest paid, the N2.7 trillion debt pile means any hike in rates will hit hard. And the liquidity mismatch, with so much short-term debt against a negative equity base, means refinancing negotiations in the next 12 months will determine whether this turnaround sticks.
What emerges from H1’26 is a company in transition. Oando has proven it can grow revenue, control costs, and generate cash. That is no small feat given where it was a year ago. But growth alone will not fix the balance sheet. The next phase will be defined by execution on asset sales, success in refinancing, and the ability to keep cash generation strong without leaning further on suppliers. If management delivers on those three fronts, the “fresh start” will be more than a narrative. If not, the operational progress made in the first half could be undone by the weight of legacy debt.
For now, Oando looks like a business that has stopped the bleeding. The question investors will ask in the second half is whether it can now start to heal.
