Oando PLC Reports Resilient Profit Despite Operational Headwinds in Q1 2025 - Miss Analyst Forcast (Awaiting Share Bonus)

Oando PLC delivered a surprising profit after tax of ₦113.1 billion in the first quarter of 2025, nearly doubling its Q1 2024 earnings of ₦59.3 billion, despite recording an operating loss of ₦120.3 billion. The performance was primarily supported by a significant tax credit of ₦165.6 billion and a sharp turnaround in net finance income, which helped cushion the impact of an unexpected operational setback.

Key Highlights:

• Revenue Growth: Revenue rose modestly by 1.9% year-over-year to ₦932.6 billion from ₦915.4 billion, reflecting steady top-line performance in a volatile macroeconomic environment.
• Gross Profit Surge: Gross profit jumped nearly 172% to ₦85.4 billion, compared to ₦31.4 billion in Q1 2024, primarily driven by a notable reduction in cost of sales (down 4.2%).
• Heavy Operating Loss Driven by Other Operating Losses: The company posted a substantial other operating loss of ₦301.9 billion, a sharp reversal from a gain of ₦248.1 billion in the previous year. This swing appears to be the key driver behind the operating loss of ₦120.3 billion, compared to a profit of ₦117.2 billion in Q1 2024.
• Positive Asset Revaluation: A significant reversal of impairment charges amounting to ₦182.3 billion was recorded, contrasting sharply with a ₦3.4 billion impairment loss a year earlier, partially mitigating operational losses.
• Net Finance Income Boost: Oando’s net finance income rose to ₦67.8 billion, up from a net finance cost of ₦46.9 billion last year. This swing was fueled by a remarkable increase in finance income (₦149.6 billion vs ₦8.2 billion), potentially from favorable investment returns or FX gains.
• Tax Credit Lifts Bottom Line: A major contributor to net profitability was the income tax credit of ₦165.6 billion, which transformed what would have been a pre-tax loss of ₦52.6 billion into a solid net profit.
• Earnings Allocation: Of the ₦113.1 billion profit, ₦111.3 billion was attributable to equity holders, reflecting a strong return for shareholders, with the balance credited to non-controlling interest.

Conclusion:

Oando’s Q1 2025 results paint a complex picture. While operational performance deteriorated significantly due to large other operating losses, the company leveraged favorable financial and tax dynamics to deliver a solid bottom-line result. The resilience in gross profit and the rebound in finance income are notable strengths. However, the volatility in non-core earnings may raise questions about earnings quality and sustainability in subsequent quarters.