Subject: Oando PLC Delivers Strong Bottom-Line Growth in FY 2024, Driven by Higher Revenue and Operating Income
Oando PLC has reported a significant turnaround in its financial performance for the year ended 31 December 2024, showcasing substantial growth across key profitability metrics, both at the Group and Company levels.
Key Highlights:
- Robust Revenue Growth: Group revenue rose sharply by 44% year-on-year to ₦4.09 trillion (2023: ₦2.85 trillion), driven primarily by increased customer contracts and improved market dynamics. However, revenue at the Company level declined markedly to ₦343.86 billion (2023: ₦1.54 trillion), reflecting potential intra-group adjustments or divestments.
- Strong Operating Income: The Group’s operating profit more than doubled to ₦569.68 billion (2023: ₦218.31 billion), underpinned by a 175% increase in other operating income to ₦1.10 trillion, suggesting gains from non-core activities, possible asset disposals, or revaluations. The Company also reversed its previous year's operating loss to report an operating profit of ₦171.10 billion.
- Cost Pressures Persist: Despite the rise in revenue, the cost of sales rose proportionally, keeping gross profit margins modest at ₦155.89 billion for the Group. The Company’s gross profit stood at just ₦253 million, indicating near-zero margin on its standalone operations.
- High Impairments and Administrative Costs: The Group recorded ₦76.23 billion in impairment charges on financial assets (up from ₦1.43 billion in 2023), possibly due to credit risk provisioning. Administrative expenses nearly tripled to ₦610.86 billion, reflecting increased operational spending.
- Net Finance Costs Widened: Finance costs at the Group level surged to ₦235.84 billion, up from ₦133.38 billion in 2023, though partially offset by higher finance income. Net finance costs stood at ₦188.64 billion, continuing to weigh on earnings.
- Bottom Line Recovery: Group profit before tax rose to ₦383.82 billion (2023: ₦102.98 billion), while net profit jumped to ₦220.12 billion, representing a 265% year-on-year increase. The Company reversed its previous loss to record a net profit of ₦111.81 billion, a marked turnaround from the ₦216.20 billion loss in 2023.
- Earnings Per Share (EPS): Basic and diluted EPS improved to ₦18/share for the Group (2023: ₦5/share), reflecting strong shareholder value creation.
Conclusion:
Oando PLC’s FY 2024 performance reflects a solid recovery and operational resilience, supported by strong revenue growth, improved operating efficiency, and a sharp rise in non-core income. Nonetheless, rising administrative costs and impairments suggest areas of concern that may require strategic cost discipline moving forward. The turnaround in the standalone company performance is notable and indicates a possible restructuring or improved asset utilization. Investors will be watching for sustained profitability, debt servicing ability, and clarity on the sources of non-operating income.
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