August 28, 2025/InvestmentOne Report

Oando s half-year 2025 performance reflects a company in transition, stronger on the operational front but still burdened by a fragile balance sheet and volatile earnings quality. Revenue in H1:2025 stood at NGN1.72trn, down 15.27% from NGN2.03trn in H1:2024. The contraction was largely due to weaker trading activity and lower realised prices, even though crude liftings rose to 14 cargoes (12.9 million barrels) compared to 10 cargoes (10.6 million barrels) in the prior year. Gross profit fell by 28.05% to NGN59.21bn in H1:2025 from NGN82.30bn in H1:2024, pushing gross margin down to 3.44% from 4.05%.

Looking ahead, we believe that the priorities clear for Oando are to to monetise the expanded upstream base through new drilling and workovers, stabilise trading through diversified flows, and execute a capital restructuring to restore financial flexibility. Management s production guidance for 2025 is unchanged at 30,000 40,000 boepd, with capex of USD250 270 million focused on drilling, infrastructure, and ESG-linked projects. Trading guidance calls for 25 35 million barrels of crude oil and 750,000 1,000,000 MT of refined products in full-year 2025, suggesting a stronger H2 performance. However, we place a SELL recommendation on OANDO.

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