Aradel Holdings Plc wants to start selling petrol in 2027 and lift utilization at its refinery above 50%. But a drop in refined-product output has put the reliability of its feedstock supply and plant operations at the center of that ambition.
The refinery produced 126.2 million litres in the first half of 2026, down about 22% from 161.4 million litres a year earlier. Feedstock constraints and unplanned downtime drove the decline. Output recovered from 58.7 million litres in the first quarter to 67.5 million in the second, but Aradel still needs to show it can sustain that improvement.
Feedstock is the hurdle
Adding premium motor spirit, or PMS, would widen Aradel’s existing refined-product mix. The planned petrol train is mechanically complete, according to CardinalStone Research, but commissioning depends on technical integration and supporting infrastructure.
Starting sales will be one milestone; running the plant consistently enough to earn an attractive return will be another.
Management’s goal of utilization above 50% highlights the gap. CardinalStone put utilization at 40.2% in the first quarter of 2026 and forecast 46% for the full year.
It expects first PMS production in 2027 but projects average utilization of 49% that year—just short of management’s ambition. Those estimates make crude availability, plant uptime and product evacuation the measures to watch.
Upstream masks the weakness
The refinery setback has not materially derailed Aradel’s consolidated earnings. Its enlarged upstream business, following the ND Western and Renaissance transactions, has provided substantially more production and income.
Downstream’s share of group revenue fell to about 5% in H1 2026, from 30% in 2025, according to data from their financial report.
Gross revenue for the six months through June 30, 2026, surged 576.8% year-on-year to ₦2.49 trillion ($1.81 billion), up from ₦368.09 billion in H1 2025. The revenue leap reflects the financial integration of ND Western Limited (in which Aradel increased its effective stake to 81.67%) and Renaissance Africa Energy Company (53.3% effective equity), alongside stronger realized crude oil and gas pricing.
Despite the top-line growth, net profit margin narrowed to 7.67% from 39.77% in H1 2025. Profit After Tax (PAT) expanded 30.5% to ₦191.04 billion.
However, net profit available to equity holders of the parent company rose by a more modest 6.32% to ₦153.66 billion. The gap was driven by a sharp increase in non-controlling interest allocations, which jumped to ₦37.38 billion, making up 19.5% of PAT, from ₦1.86 billion in the prior-year period following minority equity stakes in the acquired assets.
That smaller share of downstream cuts both ways. It means a refinery disruption now has less impact on group results, but it also means a successful PMS launch may not transform consolidated earnings immediately.
The investment case for petrol rests on Aradel proving that the refinery can operate reliably and contribute more over time—not simply adding a new product.
Follow the MoneyCentral Nigeria channel on WhatsApp: Click here!
