Aradel Holdings Plc posted an impressive N321.6 billion profit before tax for the 2024 financial year, marking a 187% increase year-over-year. The company’s revenue surged by 162.74% to N581.022 billion, driven by a significant boost in crude oil exports, gas revenue, and refined product sales. The outstanding financial performance highlights Aradel’s strengthened operational efficiencies and increased production capacity.
The company’s net profit soared by 361.10% to N247.8 billion, with earnings per share rising in tandem by 361.03% to N57.03. Free cash flow also climbed 98% year-over-year to N178.5 billion, providing financial flexibility for expansion and acquisitions. CEO Adegbite Falade credited the profitability surge to higher hydrocarbon production, better pricing, and cost optimizations, including a write-back in Asset Retirement Obligation liabilities.
Despite the strong revenue performance, rising costs led to slight margin declines. The gross profit margin dropped from 56.5% to 55.0%, while the operating margin fell from 51.8% to 51.2%, impacted by a 231.45% increase in the cost of sales and higher administrative expenses. The company noted that rising crude handling charges, depreciation, and royalties contributed to the increase in operational costs.
Aradel’s total assets grew by 89% to N1.7 trillion, while total equity nearly doubled by 97.7% to N1.4 trillion, reflecting retained earnings growth. The company successfully listed on the Nigerian Exchange in October 2024, a move CEO Falade described as a step toward enhancing shareholder value. An interim dividend of N8 per share was declared, yielding 1.48%, despite a stock price decline of 14.9% year-to-date, which later improved to -9.7% in early 2025.
Aradel plans to expand production capacity with new development projects in Olo, Olo West, and the Omerelu Fields. The company aims to achieve an annual production target of 16,000 barrels per day and 50 million standard cubic feet of gas per day. While margin pressures persist, the strong earnings growth, rising free cash flow, and strategic reinvestment in key projects position Aradel as an attractive long-term investment opportunity.Z
Source: Nairametrics