Aradel Holdings Plc has reported a profit before tax of N321.6 billion for the year ended December 31, 2024, representing a 187% 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 162.74% to N581.022 billion, up from N221.142 billion in 2023.
The significant revenue increase was primarily driven by:
- 244.6% increase in export crude oil revenue
- 174.7% increase in gas revenue
- 74.9% increase in refined products revenue
Key highlights (2024 vs 2023 FY)
- Revenue: N581.022 billion +162.74% YoY
- Cost of sales: N261.213 billion +231.45% YoY
- Gross profit: N319.809 billion +124.69% YoY
- Gen & Admin expenses: N53.839 billion +164.37% YoY
- Operating profit: N297.474 billion +160.81% YoY
- Finance cost: N23.031 billion +96.44% YoY
- Profit after tax: N247.786 billion +361.10% YoY
- Earnings per share: N57.03 +361.03% YoY
- Cash and Cash Equivalents: N422.206 billion +116.94% YoY
- Total Assets: N1.745 trillion +88.96% YoY
- Retained Earnings: N384.035 billion +83.72% YoY
- Total Equity: N1.393 trillion +97.67% YoY
CEO’s comment on performance
Commenting on the results, Aradel’s CEO, Mr. Adegbite Falade, highlighted the company’s operational and financial strides:
“The Company sustained its strong operational and financial performance in 2024, building on the improvements achieved in 2023. We recorded increased topline and bottom line, driven by significantly higher hydrocarbon production, the successful re-entry of Well 2ST in the Omerelu Field, which resulted in the attainment of First Oil on 31st May 2024, and increased sales volumes from our refinery operations.”
Profitability and cash flow strength
Aradel delivered strong profitability metrics, with a 361.10% increase in net profit and a 361.03% surge in EPS. The company attributed its surge in profitability to:
- Higher hydrocarbon production
- Stronger realized prices
- A write-back in Asset Retirement Obligation (ARO) liability provisions following current-year re-estimations
Aradel’s free cash flow (FCF) grew by 98% YoY to N178.5 billion, signaling a strong internal funding position.
This provides the company with ample financial flexibility for growth investments, refinery expansion, and acquisitions without heavy reliance on external borrowing.
Margin pressures
Despite revenue growth, Aradel experienced a drop in gross and operating profit margins, reflecting rising costs:
- Gross profit margin declined from 56.5% in 2023 to 55.0% in 2024, as cost of sales surged by 231.45%, outpacing revenue growth. This suggests an increase in crude handling charges, depreciation, royalties, and other statutory expenses.
- Operating profit margin fell slightly from 51.8% to 51.2%, impacted by a 164.37% rise in general & administrative expenses and a 77.02% increase in sales & marketing expenses.
Balance sheet strength
Aradel’s balance sheet remains robust, with:
- Total assets increased by 89% YoY to N1.7 trillion, driven by capital investments and FX adjustments.
- Total equity nearly doubled (97.7% increase) to N1.4 trillion, primarily from retained earnings and comprehensive income growth.
- Total liabilities rose by 60.9% to N352.0 billion, largely due to higher tax liabilities and FX-driven value adjustments.
Aradel’s strong asset base, growing equity, and controlled liability increase suggest financial stability and ability to sustain long-term profitability and expansion.
Market performance & investor outlook
Aradel’s landmark year in 2024 was capped by its successful listing on the NGX in October.
CEO Adegbite Falade described the listing as a “significant milestone towards fulfilling our promise to enhance shareholder value.”
- Interim Dividend: The company declared an N8 per share interim dividend, offering a dividend yield of 1.48%.
- Stock Performance: Despite its strong financial performance, Aradel’s stock declined by 14.9% YtD by the end of 2024.
However, sentiment improved in early 2025, reducing the YtD loss to 9.7% as of January 28, 2025.
Outlook and Investor Considerations
Looking ahead to 2025, Aradel plans to commence the development programs for Olo and Olo West as well as the Omerelu Fields.
- These efforts, combined with optimizing production from Ogbele with a target annual production of 16kbbls per day and 50mmscf per day indicate a strategic push for sustained growth.
- For investors, Aradel’s strong financial performance, rising free cash flow, and strategic expansion plans make it a company to watch.
While margin pressures remain a factor, the firm’s ability to maintain strong earnings growth and reinvest in key projects could drive long-term shareholder value.
