Conoil proposes N1.39 billion dividend despite 77% profit slump in 2025

Conoil Plc has proposed a dividend of N2.00 per share for the 2025 financial year, amounting to a total payout of N1.387 billion, despite reporting a sharp decline in profitability as rising borrowings and finance costs weighed heavily on earnings.

The proposed dividend, subject to shareholder approval at the company’s Annual General Meeting, represents a 42.9% decline from the N3.50 per share paid for the 2024 financial year, according to the company’s audited financial statement filed with the Nigerian Exchange (NGX) on Friday, June 12.

The audited financial statements for the period ended December 31, 2025 show that profit after tax fell by 77.1% to N2.01 billion, while earnings per share declined to N2.90 from N12.64 recorded in the previous year, suggesting weaker earnings performance during the year under review.

What the data is saying:

A review of the company’s financial performance shows that while Conoil maintained revenue above the N300 billion-mark, profitability came under significant pressure from rising financing costs and margin compression.

• Revenue declined by 6.62% to N301.72 billion from N323.12 billion
• Cost of sales fell by 6.05% to N278.81 billion
• Gross profit declined by 13.06% to N22.91 billion
• Operating profit dropped by 13.73% to N12.90 billion
• Finance costs surged 162.46% to N10.38 billion, significantly eroding earnings.
• Profit before tax plunged 77.03% to N2.53 billion
• Profit after tax declined 77.10% to N2.01 billion
• Earnings per share fell 77.06% to N2.90

The results show that the most significant drag on earnings was the sharp increase in borrowing costs, with surging finance costs severely gulping a substantial portion of operating profit generated during the year.

Compressing profits and earnings per share of N2.90 forced a lower N2.00 per share dividend payout, representing a total payout of N1.387 billion. The proposed dividend is 42.9% lower than the N3.50 per share distributed for the 2024 financial year.

Despite the earnings contraction, the company is proposing to distribute a significant portion of its earnings to shareholders.

More insights:

The balance sheet reveals that Conoil expanded its asset base during the year but relied heavily on debt financing to support that growth.

Balance sheet highlights:

• Total Assets: N139.01 billion, up +20.93% year-on-year.
• Total Liabilities: N99.94 billion, up +32.44%.
• Borrowings: N54.24 billion, up +89.17%.
• Shareholders’ Equity: N39.07 billion, down -1.06%.

The figures suggest liabilities grew considerably faster than assets, highlighting increasing leverage across the business.

Borrowings alone accounted for more than half of total liabilities, underlining the company’s growing dependence on debt financing.

The near doubling of debt levels contributed directly to the 162.46% increase in finance costs, which became the primary factor behind the steep decline in profitability.

• While total assets expanded by more than N24 billion during the year, shareholders’ equity remained largely unchanged, suggesting that asset growth was funded predominantly through liabilities rather than internally generated earnings.

The balance sheet therefore points to mounting financing pressures and weaker profitability. Finance costs rose faster than any major income line, increasing by 162.46% during the year.

Get up to speed:

Nairametrics had reported that Conoil’s pretax profit plunged 77% to N2.53 billion in 2025 financial year driven by a spike in finance costs.

• The company’s weak earnings performance has impacted its stock price movement on the NGX. The stock opened the year at N187.20 but slipped N169.00 per share on January 8.
• It traded flat until March 9, 2026 when it rose to N185.90.
• It hit a high of N204.40 on March 11, and traded broadly flat before declining to N194.00 per share on April 16.

Over the past two months, the stock price traded has remained stagnant. The market is expected to react to the dividend declaration when trading resumes on Monday.

What you should know:

Conoil remains firmly under the control of Dr. Mike Adenuga through Conpetro Limited. The directors’ shareholding schedule shows that Adenuga holds no direct shares.

However, through Conpetro Limited, he has an indirect interest in 516,403,603 shares, representing 74.40% of the company’s issued share capital.

The company’s total issued shares stand at 693.95 million shares.

Public shareholdings approximately stood at 25.6% ownership, higher than NGX’s minimum free-float requirement for Main Board companies.

The directors’ shareholding structure shows that Dr. Adenuga alone, through Conpetro Limited, effectively has controlling influence over strategic decisions and dividend policy.