In the ever-volatile world of energy trading, Conoil Plc has been navigating a complex landscape of market fluctuations, cost pressures, and strategic challenges. As one of Nigeria’s leading energy companies, Conoil’s financial performance is a barometer of the industry’s health and a testament to the company’s resilience in the face of adversity. With a strong presence in the downstream oil sector, Conoil’s latest financial results offer a fascinating glimpse into the company’s ability to adapt and thrive amidst turbulent market conditions.
Conoil Plc’s financial results for the year ended December 31, 2024, and the first quarter of 2025, provide valuable insights into the company’s performance amidst a challenging operating environment. Despite the difficulties, Conoil has demonstrated resilience, with some key metrics showing promise for future growth.
The company’s revenue surged by 60.45% to N323.123 billion in 2024, driven primarily by its white products, which accounted for 96% of total revenue. However, this growth was accompanied by margin pressures, with the gross profit margin declining by 10.72% to 8.79%. The profit before tax rose by 12.45% to N13.806 billion, while the profit after tax increased by 15.42% to N11.390 billion.
In the first quarter of 2025, Conoil’s revenue declined by 12.8% to N79.26 billion, resulting in a 93.3% plunge in profit before taxation to N372.04 million. This sharp contraction in earnings was attributed to mounting cost pressures and weaker sales performance. Despite the earnings decline, retained earnings rose by 6.9% to N35.61 billion, and shareholders’ funds improved by 6.1% to N39.78 billion.
Conoil’s balance sheet demonstrates resilience, with total assets surging 16.51% year-over-year to N113.57 billion and equity rising 27.04%. The company’s current ratio stands at 1.47, indicating a relatively stable liquidity position. However, the 38.51% year-over-year decline in cash and cash equivalents is a concern.
The company’s receivable turnover ratio is approximately 1.79 times, with days sales outstanding (DSO) of around 204 days. The payable turnover ratio is about 2.91 times, with days payable outstanding (DPO) of approximately 125 days. The inventory turnover ratio is around 6.05 times, with days inventory outstanding (DIO) of about 60 days. The cash conversion cycle stands at 139 days.
Conoil’s debt-to-equity ratio is around 106.7%, indicating a relatively high level of indebtedness. The company’s market performance has been strong, with its share price delivering an outstanding 361% year-to-date return in 2024.
In conclusion, Conoil Plc’s financial performance reflects the challenges faced by the company in a volatile market. While the company’s revenue growth and profitability have been impressive, margin pressures and high operating costs pose significant challenges. The company’s strong balance sheet and retained earnings provide a foundation for future growth, but investors will be closely monitoring Conoil’s strategic responses to market dynamics in the downstream oil sector ¹.
