Oando PLC, Africa’s prominent integrated energy group, is navigating a perfect storm: a ₦3 trillion debt mountain, a significant revenue contraction due to the “Dangote Effect” on fuel trading, and a deeply underwater balance sheet featuring a negative equity of ₦553.82 billion.
Oando is also facing intensified liquidity pressure as its borrowing costs surged past its operational earnings in 2025.
The company’s interest coverage ratio plummeted to 0.59, down from 3.02 the previous year, signaling that the firm is currently unable to meet its interest obligations from core operating profit.
The Coverage Gap: Interest Costs Eclipse EBIT
Oando’s financial “margin of safety” has effectively evaporated over the past twelve months:
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The Deficit: The group generated earnings before interest and tax (EBIT) of ₦50.23 billion, which was insufficient to cover its ₦84.30 billion in net finance costs.
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Solvency Risk: An interest coverage ratio below 1.0 is a red flag for credit analysts, indicating that a firm is not generating enough cash from operations to service its debt, making it vulnerable to default without constant restructuring or asset sales.
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Debt Expansion: Total borrowings rose nearly 9% to ₦3 trillion, driven by the impact of Naira depreciation on dollar-denominated loans and increased drawdowns for upstream capital projects.
The “Dangote Effect”: Trading Revenue Slumps 21%
The transformation of Nigeria’s downstream landscape has forced a painful pivot for Oando’s trading arm:
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Revenue Retreat: Group revenue fell 21% to ₦3.21 trillion, down from ₦4.09 trillion in 2024.
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PMS Pause: Oando significantly reduced its gasoline imports and refined-product trading as the Dangote Refinery ramped up production, fundamentally altering the supply dynamics that once drove Oando’s high-volume trading business.
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Gross Profit Collapse: The shift in revenue mix, led to an 82% crash in gross profit, which fell to ₦27.8 billion.
Balance Sheet Strain: Payables Surge as Equity Erodes
Oando’s working capital position shows signs of severe stress as it leans on creditors to maintain operations:
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Creditor Pile-up: Trade and other payables jumped 14.6% to ₦2.95 trillion, as the group seeks to manage its cash flow by extending payment cycles.
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Receivables Impairment: Of the group’s ₦1.089 trillion in receivables, nearly 28% (₦305.98 billion) has been written off as impaired, suggesting deepening difficulty in collecting cash from counterparts.
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Negative Equity: With liabilities far outweighing assets, the group ended 2025 with a negative total equity of ₦553.82 billion, leaving it technically insolvent without a massive capital injection or debt-to-equity swap.
Commenting on the results, Wale Tinubu CON, Group Chief Executive, Oando PLC, said:
“In our downstream trading business, we responded decisively to evolving market dynamics by deliberately rebalancing our portfolio away from gasoline importation toward higher-margin crude and gas opportunities. We expanded global exports and leveraged structured offtake and pre-export financing arrangements to support liquidity, cash-flow resilience and effective production monetisation for our clients.”
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