2025 was a grim year for Conoil Plc, marked by a 77% drop in profit and falling earnings per share (EPS), the lowest in five years, according to the company’s unaudited 2025 results
The downturn can be attributed to thin gross and operating profit margins, higher interest expenses, and a decline in white product sales, Conoil’s major revenue stream.
The company’s stock lost 52% of its value in 2025 and has continued its slide with a 9.72% loss so far in 2026.
However, the company’s strong history of dividend payouts and growth provides a foundation for recovery, and 2026 must be the year to turn things around.
Five years of strong performance:
Over the past five years, Conoil has been on a steady upward trajectory, posting consistent growth in both profit and EPS.
The company’s compound annual growth rate (CAGR) for both profit and EPS stood at an impressive 57%.
This growth was also reflected in the company’s ability to consistently reward its shareholders. Conoil increased its dividend per share (DPS) at a healthy CAGR of 18% per year, signaling its strong financial position and commitment to returning value to investors.
2025: A break in trend
But 2025 marked a break from this trend. Rising operational costs and finance costs, particularly from increased borrowing, took a toll on the company’s bottom line.
- Conoil’s interest in bank overdrafts and rising debt pushed its finance costs up by 163%, squeezing profits.
- This financial burden, compounded by a volatile macroeconomic environment, pushed profit after tax down by 77%, falling to just N2 billion, the lowest in five years.
- Another thing is that its ability to service debt from operating profit suffered significantly, dropping to 1x from 6x.
- Revenue also saw a decline, with a 6.6% drop in overall sales, largely driven by a downturn in the white products segment. These core petroleum product sales, which account for the bulk of Conoil’s revenue, struggled, probably due to price fluctuations and subsidy changes in Nigeria’s fuel market.
Investor sentiment and dividend outlook
As a result, Conoil’s dividend payout, a source of pride for investors, is uncertain. Despite the company’s strong track record, 2025’s results left shareholders wondering if Conoil could continue its dividend streak.
- The low profit, combined with a paltry net cash flow from operations of N176 million, made it increasingly difficult to justify paying out the same level of dividends.
On market performance, Conoil’s stock lost 52% of its value in 2025, closing the year at N187.20, and the stock has continued its decline in 2026, with another 9.72% loss so far.
This steep fall in stock price has raised concerns about the company’s valuation, especially since Conoil is currently trading at 53 times its trailing EPS, a high multiple reflecting overvaluation in light of its reduced earnings.
The road to Recovery:
For investors, the primary question is whether Conoil will continue its dividend payout in 2025. Given the sharp decline in earnings, the company may need to adjust its dividend to reflect the current financial strain.
However, paying a dividend, albeit a reduced one, would send a powerful signal of stability, reaffirming Conoil’s commitment to shareholders.
It would also help support the stock price and begin the process of restoring investor confidence.
Looking ahead to 2026
Looking ahead to 2026, Conoil will need to focus on cost-cutting measures, boosting revenue from its lubricants business, and reducing its debt burden to get back on track.
While the road to recovery may be challenging, Conoil has the history and market presence to potentially turn things around.
For shareholders, the hope is that 2026 will be the year that Conoil once again delivers on its promise of growth, profitability, and consistent returns.
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