Aradel’s 9M revenue hits N3.95 trillion, pre-tax profit rises 154%, declares interim dividend

Aradel Holdings Plc reported a 154.3% increase in consolidated pre-tax profit to N764.71 billion for the nine months ended September 30, 2026, from N300.68 billion in the corresponding period of 2025, driven by stronger crude oil and gas operations.

According to the company’s unaudited financial statements and earnings release dated October 30, 2026, revenue surged by 633% to N3.95 trillion from N538.81 billion, while operating profit increased by 832.4% to N1.56 trillion.

Aradel also reported EBITDA of N2.10 trillion, up from N261.5 billion, while net cash generated from operating activities increased to N2.46 trillion from N205.41 billion.

However, consolidated profit after tax declined by 82.3% to N43.30 billion from N245.12 billion, reflecting substantial finance costs associated with the Renaissance acquisition and higher tax expenses.

Sequel to this, Aradel’s board declared an interim dividend of N7.00 per share, totalling N30.4 billion, with a qualification date of November 27, 2026, and payment scheduled for December 7, 2026.

The dividend will be paid electronically to eligible shareholders who have completed their e-dividend registration.

Key Highlights

• Revenue: N3.95 trillion (Up 633% YoY from N538.81 billion).
• Gross profit: N1.66 trillion (Up 608.7% YoY from N234.72 billion).
• EBITDA: N2.10 trillion (Up approximately 702% YoY from N261.5 billion).
• Operating profit: N1.56 trillion (Up 832.4% YoY from N167.53 billion).
• Earnings per share: N32.57 (Down 41.7% YoY from N55.90).
• Total assets: N10.76 trillion (Up 8.7% from N9.90 trillion at December 2025).
• Total borrowings: N1.51 trillion (Down 24.8% from N2.00 trillion at December 2025).
• Cash and cash equivalents: N2.00 trillion (Up 32.8% from N1.50 trillion at December 2025).
• Shareholders’ funds: N1.95 trillion (Down 9.1% from N2.15 trillion at December 2025).
• Net cash position: N532.3 billion, compared with net debt of N475.1 billion at December 2025.

Management comment

Commenting on the results, Aradel Holdings’ Chief Executive Officer, Adegbite Falade, said:

• “The first nine months of 2026 demonstrated what our enlarged portfolio can deliver. Group production ran above our full-year guidance range, with strong growth in both crude oil and gas output. This drove a step-change in revenue and EBITDA, alongside improved margins.”
• He added: “Our operations generated substantial cash, which allowed us to fund our investment programme, reduce our debt and move the Group from a net debt to net cash position.”

On the Renaissance earnout arrangement, Falade stated:

• “We are well underway in constructive engagements with the seller to address the imbalance in the earnout arrangement and make it more equitable.”

Meanwhile, the company raised its full-year 2026 production guidance to an average 140,000–150,000 barrels of oil equivalent per day, from the previous range of 110,000–140,000, following stronger-than-expected production during the nine-month period.

Driving the numbers

Aradel’s nine-month revenue growth was largely driven by its crude oil and gas businesses, following the full consolidation of ND Western and Renaissance operations.

• Crude oil revenue increased by 701.9% to N2.74 trillion from N341.45 billion, while gas revenue rose to N1.01 trillion from N34.27 billion, representing growth of approximately 2,846%.
• Revenue from refined products increased by 23.9% to N202.04 billion from N163.10 billion.
• Combined, crude oil and gas contributed approximately N3.75 trillion, accounting for 95% of group revenue.
• The increase was supported by stronger production, with average daily output rising by 502% to 144,700 barrels of oil equivalent per day from 24,000 barrels in the corresponding period of 2025.
• Crude oil production increased by 279% to 57,900 barrels per day, while gas production rose by 895% to 503.6 million standard cubic feet per day.

Management attributed the gas production increase to expanded processing capacity, improved pipeline availability and sustained customer demand.

However, the company noted that the year-on-year growth figures largely reflected the consolidation of ND Western and Renaissance, which were previously accounted for as associates.

Improved operating margins support profitability

The stronger revenue performance translated into higher gross profit, which increased by 608.7% to N1.66 trillion from N234.72 billion.

• Cost of sales increased to N2.29 trillion from N304.08 billion, reflecting the enlarged group’s operations, higher royalty payments, maintenance expenses and a N455.80 billion stock adjustment associated with an overlift position.
• Despite these cost increases, EBITDA rose to N2.10 trillion from N261.5 billion, while EBITDA margin improved to 53% from 49%.
• Operating profit also increased by 832.4% to N1.56 trillion from N167.53 billion, supported by stronger gross earnings and other income of N253.09 billion, compared with N13.77 billion in 2025.

Management explained that the increase in other income was largely driven by crude handling fees earned from third-party use of the group’s evacuation infrastructure.

Unit field operating costs also declined by 28% to $7.9 per barrel of oil equivalent from $11.0, supported by improved reliability of the Trans Niger Pipeline and lower field activity costs.

Renaissance earnout and tax expenses weigh on reported earnings

Despite the improvement in operating performance, finance costs rose significantly to N841.12 billion from N21.39 billion in the corresponding period of 2025.

• The largest component was a N529.10 billion charge relating to contingent consideration under Renaissance’s acquisition of SPDC, accounting for approximately 62.9% of total finance costs.
• The seller of SPDC is entitled to additional consideration based on its retained economic interest in a defined portion of Renaissance’s assets, calculated by reference to net revenues from those assets.

Aradel explained that this obligation is recognised as contingent consideration, with the associated charge recorded under finance costs.

• On the other components; interest on bank borrowings also rose to N251.06 billion from N17.41 billion, while the unwinding of discounts on provisions contributed N57.65 billion.
• Consequently, net finance costs increased to N797.35 billion from N6.03 billion, absorbing a substantial portion of operating profit.
• Nevertheless, pre-tax profit increased by 154.3% to N764.71 billion.
• Then came another pressure; taxation on reported net earnings came, with income tax expense rising to N721.41 billion from N55.56 billion.

The tax charge comprised N1.04 trillion in current tax, partly offset by a deferred tax credit of N316.02 billion.

According to management, the increase reflected the higher applicable petroleum tax rates under the old petroleum tax regime, to which the newly consolidated ND Western and Renaissance operations are subject, compared with the rates under the Petroleum Industry Act (PIA).

• The Renaissance earnout charge also reduced reported pre-tax profit, contributing to an unusually high effective tax rate of approximately 94.3%.
• After accounting for taxation, consolidated profit after tax stood at N43.30 billion, compared with N245.12 billion in the corresponding period of 2025.

The company explained that excluding the N529.10 billion Renaissance earnout charge, profit after tax would have reached N572.4 billion, representing a 134% increase over the corresponding period of 2025. This is an alternative performance measure rather than reported IFRS profit.

The group, alongside other Renaissance shareholders, is therefore engaging the seller to address the arrangement.

Cash generation and balance sheet

On the balance sheet, total assets increased by 8.7% to N10.76 trillion from N9.90 trillion at the end of 2025, supported by higher current assets.

• Cash and cash equivalents rose by 32.8% to N2.00 trillion from N1.50 trillion, while trade and other receivables increased to N2.49 trillion from N1.73 trillion.
• Total borrowings declined by 24.8% to N1.51 trillion from N2.00 trillion, comprising N1.39 trillion in non-current borrowings and N116.28 billion in current borrowings.

Management attributed the reduction in debt to the full repayment of two facilities during the first quarter and scheduled repayments across the group.

Consequently, Aradel moved from a net debt position of N475.1 billion at December 2025 to a net cash position of N532.3 billion at September 2026.

On cash flow, Aradel’s cash generation strengthened during the nine-month period, with net cash from operating activities increasing to N2.46 trillion from N205.41 billion.