Conoil Plc, one of Nigeria’s leading downstream petroleum companies, has reported a significant downturn in its financial performance for the third quarter (Q3) of 2025. According to its unaudited financial statements released on November 1, 2025, the company’s profit before tax (PBT) dropped sharply by 85.5% year-on-year to ₦728 million, compared to ₦5.02 billion in Q3 2024.
This weak quarterly result contributed to a steep 88% decline in Conoil’s nine-month pre-tax profit, which fell to ₦1.88 billion from ₦15.24 billion in the corresponding period last year. The company also suffered a double-digit decline in revenue, underscoring the impact of lower product sales, rising costs, and macroeconomic headwinds on its operations.
Revenue and Profit Decline
Conoil’s Q3 2025 revenue stood at ₦60.18 billion, representing a 12.22% decline from ₦68.56 billion recorded in the same quarter of 2024. The drop in sales volume, particularly in the company’s flagship White Products segment — which includes petrol (PMS), diesel (AGO), and kerosene (DPK) — weighed heavily on overall revenue performance.
For the nine-month period, revenue decreased by 18.18% to ₦203.83 billion, compared to ₦249.18 billion recorded last year. This decline reflects a challenging operating environment marked by weaker consumer demand, higher fuel importation costs, and volatility in foreign exchange rates.
Despite a 9.42% drop in the cost of sales to ₦54.86 billion, Conoil’s gross profit fell sharply by 33.8% year-on-year to ₦5.31 billion, from ₦8.02 billion a year earlier. The company’s gross profit margin narrowed from 11.7% in Q3 2024 to 8.8% in Q3 2025, indicating reduced profitability per unit sold.
Operating Performance Under Pressure
Operating profit for the quarter slumped 35.8% year-on-year to ₦1.64 billion, as inflationary pressures and rising administrative costs continued to erode margins. Administrative expenses climbed by 24%, largely driven by higher staff-related costs, energy expenses, and increased logistics spending amid a persistent rise in general price levels.
The company’s performance was further strained by escalating finance costs, which soared by an alarming 744% year-on-year to ₦2.13 billion, up from ₦252 million in Q3 2024. This spike was primarily attributed to increased borrowing costs, as the company’s total loans and borrowings expanded to ₦39.69 billion, compared to ₦28.68 billion in the previous year.
With the surge in financing costs outpacing revenue growth, profit after tax (PAT) plummeted 86.8% to ₦564 million, from ₦4.28 billion in Q3 2024. Consequently, earnings per share (EPS) dropped to ₦0.81, representing an 86.3% decline year-on-year.
Balance Sheet and Liquidity Position
Despite its profitability challenges, Conoil’s balance sheet showed moderate growth. Total assets rose 9.78% to ₦126.19 billion, up from ₦114.9 billion a year earlier. The increase was largely driven by a rise in trade receivables and inventories, which together reflect the company’s efforts to maintain supply despite sluggish demand.
However, the sharp 82% increase in trade receivables to ₦76.21 billion signals growing difficulties in collecting payments from customers, posing potential liquidity risks in the near term. On the liabilities side, higher borrowings added to pressure on the company’s cash flow and balance sheet flexibility.
Shareholders’ funds grew modestly by 3.71% to ₦40.96 billion, supported by retained earnings and asset revaluation gains. Yet, analysts warn that the sustained erosion in profit margins and mounting debt could weigh on shareholder value if the trend continues into Q4 2025.
Market Performance and Investor Sentiment
Conoil’s share price has mirrored its declining fundamentals in 2025. The stock, which opened the year at ₦387.20, has shed 50.8% of its value, closing at ₦190.70 as of October 31, 2025. The share price has remained flat since October 21, suggesting limited investor confidence and weak trading sentiment around the company’s short-term recovery prospects.
Market analysts attribute the decline in Conoil’s valuation to investor concerns over falling profitability, high debt exposure, and the company’s vulnerability to macroeconomic pressures — particularly fuel price volatility, rising interest rates, and FX scarcity.
Outlook
Conoil Plc faces significant challenges heading into the final quarter of 2025. While management continues to focus on operational efficiency and cost control, the company’s earnings outlook remains clouded by persistent macroeconomic instability, high borrowing costs, and reduced consumer purchasing power.
Industry watchers suggest that unless the company can strengthen its receivables management, diversify its revenue base, and mitigate rising finance expenses, profitability recovery may remain slow. Nevertheless, Conoil’s resilient balance sheet and established market presence in the downstream petroleum sector provide some cushion against short-term shocks.
