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Aradel Holdings Plc, a Nigerian integrated energy firm recorded double digit profit growth in the First Half (H1) of 2025, as production volumes stabilized, however there is a major risk for investors buried in the notes of the earnings result.
Aradel said it had contingent liabilities in respect of legal suits against Aradel Energy Limited as the operator of the Ogbele oil field, and the possible liabilities from these cases amount to N1.2 trillion.
The liabilities have not been incorporated into its released financial statements, according to Aradel, which says the Group will not suffer any loss from the outstanding claims.
Aradels Profit after tax (PAT) increased by 40.19 percent to N146.39 billion in June 2025 from N104.42 billion as at June 2024.
The uptick in profit was supported by a 108.86 percent surge in finance income to N12.49 billion, which salvaged the firm from operational losses and deteriorating net margins.
Revenue was up 37.18 percent to N368.07 billion in June 2025 from N268.31 billion as at June 2024.
As a result of rising input costs, operating profit dipped by 21.06 percent to N118.61 billion while gross profit rose by a meagre 1.05 percent to N163.15 billion in the period under review.
Aradel has enough cash to cover its debts and other obligations, which validities the company’s stable liquidity position.
For instance, it has a cash ratio of 1.50, from 1.96, according to MoneyCentral calculations. A company’s cash ratio measures how easily it can cover its short-term liabilities using only its most liquid assets: cash and cash equivalents.
The cash ratio is more conservative than other liquidity ratios because it only considers a company’s most liquid resources.
A calculation that’s greater than one means that a company’s cash on hand exceeds its current debts. A calculation of less than one means that a company has more short-term debt than cash.
“The first half of 2025 was shaped by both opportunities and challenges for Nigeria’s oil and gas industry. Global geopolitical tensions continued to drive supply uncertainties and price volatility, while local operating conditions, from infrastructure to regulatory transitions, demanded resilience and adaptability,” said Chief Executive Officer of Aradel Holdings Plc, Adegbite Falade.
Aradel is embarking on a scheme of business combination so as to expand its market share and deliver higher returns to shareholders.
The company successfully completed the acquisition of equity interest in Chappal Energies Mauritius Limited.
Furthermore, its recent investment in Renaissance Africa Energy Company (Renaissance’), its deemed associate, has yielded positive returns, with the firm’s share of its performance featuring in Aradel’s books for the first time.
ND Western Limited and Renaissance Africa Energy Company are expected to remain significant contributors to the company’s bottom-line from non-operated assets into the future. The consistent performance of Aradel associate companies underscores the strategic value of its stake and supports its broader portfolio diversification objectives.
Aradel Holdings shares closed trading on Thursday up 3.09% to N530 per share. Aradel has a market capitalization of N2.27 trillion ($1.46 billion) and its stock has returned -11.37% year to date, underperforming the market which is up 35.89% so far in 2025.
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