June 26, 2026/InvestmentOne Report
Aradel delivered its first quarter as the fully consolidated enlarged Group, with Group revenue of NGN728.52bn (+264.50% YoY), EBITDA of NGN537.73bn (+517.65%), and Profit After Tax of NGN120.29bn (+251.76%). The result represents a step-change in the Group’s scale following the consolidation of ND Western Limited (NDW) and Renaissance Africa Energy Company (RAEC) at FY:2025.
However, beneath the headline numbers, Renaissance JV production tracked materially below management s guidance, the reported effective tax rate was inflated by deferred-tax adjustments from purchase price allocation finalisation, and the appreciation of the Naira led to a contraction in the translation reserve to NGN211.34bn.
Counterbalancing these, the Group delivered exceptional operating cash flow of NGN868.33bn (+2,735.83% YoY), reducing net debt to NGN179.09bn from NGN498.73bn at FY:2025, and settled the first NGN71.96bn earnout payment on the contingent consideration liability.
We maintain our STRONG BUY recommendation on Aradel. While Q1:2026 earnings were flattered by non-recurring Other Income and Renaissance JV crude output remains below guidance, we believe the Group s enlarged asset base, strong operating cash flow, low leverage and improving production outlook support a compelling investment case. Our valuation appropriately captures Aradel s standalone upstream operations, ND Western/Renaissance exposure, gas and refining assets, and balance-sheet optionality, leaving meaningful upside to our target price.
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