Energy firm’s revenue climbed 20% to N2.06tn, but soaring finance costs and debt servicing erased strong operational gains in the first half of 2026
Oando PLC reported an N32.84 billion pre-tax loss for the six months ended June 30, 2026, as rising interest expenses and heavy debt servicing obligations outweighed a strong rebound in operating performance despite robust revenue growth.
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The Oando N32.84bn Pre-Tax Loss was disclosed in the company’s unaudited interim financial statements filed with the Nigerian Exchange Limited (NGX) and signed by Group Chief Executive Jubril Tinubu and Group Chief Financial Officer Adeola Ogunsemi.
The results showed that group revenue increased by 20 per cent to N2.06 trillion, compared with N1.72 trillion recorded in the corresponding period of 2025.
Although the cost of sales rose to N1.96 trillion from N1.70 trillion, gross profit improved significantly to N101.19 billion, up from N23.48 billion in the first half of last year.
Supported by a recovery in other operating income, which rose to N48.52 billion, alongside controlled administrative expenses, Oando posted an operating profit of N127.84 billion, reversing the N158.71 billion operating loss recorded in the same period of 2025.
However, the company’s improved operational performance was offset by a sharp increase in financing costs.
Net finance expenses surged to N161.30 billion, driven by finance costs of N167.58 billion, while finance income declined sharply to N6.28 billion from N158.99 billion a year earlier.
Commenting on the results, the company’s leadership acknowledged that financing costs continued to weigh heavily on profitability.
“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,” management stated.
Despite the pre-tax loss, Oando recorded a net profit after tax of N68.56 billion, representing an eight per cent increase from N63.31 billion achieved in the first half of 2025.
The improved bottom line was largely supported by a tax credit of N101.40 billion, which helped offset the impact of higher borrowing costs.
The financial performance comes after Oando completed its $783 million acquisition of the Nigerian Agip Oil Company from Italian energy company Eni, a transaction that significantly expanded the group’s upstream portfolio.
The acquisition doubled Oando’s participating interests to 40 per cent in Oil Mining Leases (OMLs) 60, 61, 62 and 63, adding 24 producing oil and gas fields, extensive pipeline infrastructure and gas processing facilities.
As a result, the company’s average daily production increased by 16 per cent year-on-year to 42,789 barrels of oil equivalent per day during the review period.
Despite the operational gains, Oando’s balance sheet remains under pressure.
The company reported total liabilities of N8.42 trillion, while shareholders’ equity remained in a deficit position of N530.45 billion, highlighting the continued strain from its debt profile.
The group’s external auditors had previously drawn attention to uncertainties surrounding its capital structure, warning that long-term financial stability depends on successful debt reduction and sustained revenue growth.
In their report, the auditors stated that the company continues to carry significant financial obligations and noted that recovery would depend on “successful actions to raise capital to pay down the significant debt levels and through achievements of revenue forecasts.”
Looking ahead, Oando said it would continue focusing on optimising its expanded asset portfolio, improving production efficiency and maintaining disciplined capital expenditure to strengthen cash flow and gradually reduce debt.
Management reiterated that core asset optimisation remains central to its long-term growth strategy, with ongoing well intervention programmes and portfolio adjustments expected to support stronger operational performance in the coming quarters.
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The results underscore the contrasting realities facing many upstream energy companies, where improved production and revenue growth continue to be challenged by elevated financing costs arising from major acquisitions and expansion projects.
David Okere is a journalist and contributor to Freelanews.com, covering business, governance, public affairs, and human-interest stories with a commitment to accuracy, balance, and public interest reporting.
