Oando’s Q1 2025 Results: Improving Margins, Widening Losses
Oando Plc’s unaudited financial results for the first quarter of 2025 reveal a business navigating a delicate balance — showing signs of operational improvement on one hand, while grappling with deepening structural and financial challenges on the other.
Oando reported a revenue of N932.6 billion for the period ended March 31, 2025. This reflects a modest 2.1% increase from the N913.5 billion posted in the same period last year, buoyed by stable international oil prices and higher crude export volumes.
A more noteworthy development in the Q1 report is the reduction in cost of sales, which declined to N847.1 billion from N884.0 billion in Q1 2024. This improvement contributed to a sharp rise in gross profit — surging from N31.4 billion to N85.4 billion, effectively tripling year-on-year. The enhanced gross profit margin suggests early success in cost containment efforts and improved operational efficiencies.
However, despite this positive momentum at the gross level, the company’s broader financial health tells a more concerning story.
Oando swung from a robust N258.0 billion in operating profit in Q1 2024 to a significant N301.9 billion operating loss in Q1 2025 — a reversal that has alarmed market observers. The magnitude of this shift points to underlying inefficiencies across administrative, financing, and possibly non-recurring expense lines. It also reflects the company’s ongoing difficulty in translating topline resilience into sustainable profitability.
The pre-tax loss recorded in the quarter further underscores the scale of the company’s operational setbacks, erasing gains from improved gross performance and signaling deeper structural headwinds.
In a somewhat puzzling twist, Oando reported earnings per share (EPS) of N9, up from N5 in the previous year’s first quarter. This upbeat EPS figure stands in stark contrast to the broader losses and is likely influenced by exceptional or non-operating income — potentially including revaluation gains or other comprehensive income. Analysts caution that this anomaly warrants further scrutiny and may not reflect the company’s core earnings strength.
Investor response has mirrored the mixed nature of the results. Oando’s share price had trended upward in the weeks leading to the earnings release, reflecting cautious optimism or speculative interest. However, the stock pulled back following the report, closing at N62.50 on June 24, 2025 — a signal that the market is reassessing its medium-term outlook for the company.
The Q1 2025 results encapsulate Oando’s precarious position: modest revenue growth and improved gross margins are encouraging, but they are being undermined by persistent cost pressures and financial inefficiencies. The company’s ability to stabilise operations, enhance cost controls, and strengthen internal governance will be critical in determining whether this recovery narrative takes hold or unravels further.
In a volatile energy landscape and amid rising scrutiny from stakeholders, the coming quarters will be pivotal for Oando Plc. Investors and analysts alike will be watching for signs of strategic recalibration — and more importantly, for evidence that the company can convert operational gains into sustained bottom-line performance.
Despite recent share price gains, the reversal post-earnings release reflects growing investor caution. Until the company demonstrates clearer cost discipline and sustainable profitability, we recommend a “HOLD” position. Investors should await stronger evidence of earnings quality and operational turnaround before accumulating further.#Oando’s Q1 2025 Results: Improving Margins, Widening Losses#
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