Conoil Plc has reported a profit before tax of N13.806 billion for the year ended December 31, 2024, representing a 12.45% year-over-year (YoY) growth from the previous year.
The unaudited Group financial statements, reviewed by Nairametrics, show that the company’s revenue surged by 60.45% to N323.123 billion, up from N201.387 billion in 2023.
The significant revenue increase was primarily driven by revenue from its white products, which accounted for 96% of total revenue and grew by 62.42% YoY
Key highlights (2024 vs 2023 FY)
- Revenue: N323.128 billion +60.45% YoY
- Cost of sales: N294.720 billion +62.33% YoY
- Gross profit: N28.407 billion +43.25% YoY
- Sales and distributing expenses: N4.991 billion +80.63% YoY
- Gen & Admin expenses: N5.728 billion +27.54% YoY
- Finance cost: N3.883 billion +98.58% YoY
- Profit after tax: N11.390 billion +15.42% YoY
- Earnings per share: N16.41 +15.40% YoY
- Cash and Cash Equivalents: N6.964 billion -38.51% YoY
- Total Assets: N113.570 billion +16.51% YoY
- Retained Earnings: N37.935 billion +30.93% YoY
- Total Equity: N42.107 billion +27.04% YoY
Investor insight and takeaways
Revenue growth is strong. However, with 98% of revenue concentrated in white products, Conoil may be vulnerable to oil price fluctuations.
Expanding into lubricants or non-fuel segments could improve long-term stability. Revenue from lubricants contributes a paltry 2% to total revenue.
Margin pressures
Despite revenue growth, Conoil experienced a drop in profit margins. Gross reflecting rising costs:
- The gross profit margin declined by 10.72% to 8.79% as the cost of sales surged by 62.33%, outpacing revenue growth.
- Pre-tax profit margin fell by 30% to 4.27%, indicating that higher operating and finance costs eroded earnings growth.
- Net profit margin also declined by 28% to 3.52%, despite a 15.42% growth in profit after tax.
This suggests that the company’s costs, especially the cost of sales, finance costs, and operating expenses, grew at a faster pace than its revenue, which pressured profitability.
Balance sheet strength:
Conoil Plc’s balance sheet demonstrates resilience, with stronger assets, rising equity, and improved short-term financial stability.
- Total assets surged 16.51% YoY to N113.57 billion, indicating business expansion, while equity rose 27.04%.
- Additionally, retained earnings jumped 30.93%, showing that the company is reinvesting profits rather than relying heavily on external financing.
- Despite a modest improvement in its current ratio to 1.54, the 38.51% YoY decline in cash and cash equivalents is a concern.
Market performance
Conoil’s share price delivered an outstanding 361% year-to-date (YtD) return in 2024, building on an already impressive 217% YtD return in 2023.
This reflects strong investor confidence
However, as of January 2025, the share price has remained flat, suggesting that investors are waiting for new catalysts, such as earnings announcements or dividend declarations before making further moves.
With an annual dividend of N3.50, the stock offers a trailing dividend yield of 0.90%.
Given its profitability growth and strong retained earnings, Conoil is expected to pay a dividend for the 2024 financial year