Aradel Sees 187% Surge in Pre-Tax Profit

Aradel Holdings Plc has announced a profit before tax of N321.6 billion for the year ending December 31, 2024, reflecting a 187% year-over-year increase from the previous year.

The company’s unaudited financial statements indicate a significant revenue surge of 162.74%, rising from N221.142 billion in 2023 to N581.022 billion in 2024.

The substantial revenue increase was primarily driven by a 244.6% rise in export crude oil revenue, a 174.7% increase in gas revenue, and a 74.9% boost in refined products revenue.

For the 2024 financial year, the company recorded revenue of N581.022 billion, with cost of sales rising to N261.213 billion, resulting in a gross profit of N319.809 billion. General and administrative expenses stood at N53.839 billion, while operating profit reached N297.474 billion. Finance costs amounted to N23.031 billion, and profit after tax climbed to N247.786 billion. Earnings per share rose to N57.03, while cash and cash equivalents grew to N422.206 billion. Total assets increased to N1.745 trillion, retained earnings stood at N384.035 billion, and total equity rose to N1.393 trillion.

Aradel’s CEO, Adegbite Falade, underscored the company’s operational and financial advancements, stating that the company sustained strong performance in 2024 by building on improvements achieved in 2023. He attributed the increased topline and bottom line to significantly higher hydrocarbon production, the successful re-entry of Well 2ST in the Omerelu Field, which resulted in the attainment of First Oil on May 31, 2024, and increased sales volumes from refinery operations.

The company’s profitability soared, with a 361.10% increase in net profit and a 361.03% surge in earnings per share. The improved financial performance was driven by higher hydrocarbon production, stronger realized prices, and a write-back in Asset Retirement Obligation liability provisions following current-year re-estimations. Free cash flow grew by 98% year-over-year to N178.5 billion, signaling a strong internal funding position that allows for growth investments, refinery expansion, and acquisitions without heavy reliance on external borrowing.

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Despite revenue growth, Aradel experienced a decline in gross and operating profit margins due to rising costs. The gross profit margin dropped from 56.5% in 2023 to 55.0% in 2024, as the cost of sales surged by 231.45%, outpacing revenue growth. This suggests an increase in crude handling charges, depreciation, royalties, and other statutory expenses. Operating profit margin declined slightly from 51.8% to 51.2%, impacted by a 164.37% rise in general and administrative expenses and a 77.02% increase in sales and marketing expenses.

Aradel’s balance sheet remained strong, with total assets rising 89% year-over-year to N1.7 trillion, driven by capital investments and foreign exchange adjustments. Total equity nearly doubled, increasing by 97.7% to N1.4 trillion, primarily due to retained earnings and comprehensive income growth. Total liabilities grew by 60.9% to N352.0 billion, largely driven by higher tax liabilities and foreign exchange-related value adjustments. These financial indicators reflect the company’s stability and capacity to sustain long-term profitability and expansion.

The company had a landmark year in 2024, marked by its successful listing on the NGX in October. CEO Adegbite Falade described the listing as a significant milestone toward fulfilling the promise of enhancing shareholder value. The company declared an N8 per share interim dividend, offering a 1.48% dividend yield. Despite its strong financial performance, Aradel’s stock declined by 14.9% year-to-date by the end of 2024. However, market sentiment improved in early 2025, reducing the year-to-date loss to 9.7% as of January 28, 2025.

Looking ahead, Aradel plans to commence development programs for the Olo and Olo West fields, as well as the Omerelu Field. These initiatives, alongside production optimization at Ogbele with a target annual production of 16kbbls per day and 50mmscf per day, indicate a strategic push for sustained growth. With a strong financial position, rising free cash flow, and well-planned expansion strategies, Aradel remains a company to watch. While cost pressures persist, the firm’s ability to maintain strong earnings growth and reinvest in key projects could drive long-term shareholder value.