The oil and gas sector emerged as the top performer in Nigeria’s equities market in 2024, with the index soaring by over 160%, largely driven by Oando Energy Plc’s remarkable 508.29% surge.
The company’s stock closed the year at ₦66 per share, reflecting investors’ confidence in its aggressive expansion strategy through acquisitions despite global market uncertainties.
Oando’s market valuation peaked at over ₦1 trillion in the second half of 2024 before receding to ₦820 billion, following a wave of selloffs triggered by a disappointing third-quarter earnings report. The company’s profit after tax for Q3 2024 declined by 31%, settling at ₦76.3 billion, according to unaudited figures. This decline was attributed to foreign exchange losses and increased net finance costs.
Despite the profit slump, Oando recorded a robust revenue growth of 36% year-on-year, climbing to ₦3.189 trillion by the end of the nine-month period in 2024, compared to ₦2.349 trillion in the same period of 2023. Management attributed the revenue growth to favourable exchange rate translations and higher crude oil volumes during the period.
However, the gains were partially offset by reduced trading volumes, lower natural gas and NGL sales, and declining realised prices for these products. Additionally, administrative expenses surged, driven by foreign exchange losses from the revaluation of payables and borrowings, causing operating profit to drop by 23%.
Market analysts remain optimistic about Oando’s earnings potential in 2025, citing expectations of stable oil prices and the company’s enhanced revenue capacity following its recent acquisitions. While concerns over the company’s increased leverage persist, analysts believe the expanded earnings base will more than compensate for the higher debt levels.
Investors are closely watching the global commodity market and Oando’s operational performance, anticipating that the company’s strategic moves will sustain its upward momentum in the oil and gas sector in 2025.
