Aradel Grows Profit by 169% to $88.8m, Declares Interim Dividend

Aradel Holdings Plc grew profit after tax by more than 169% to $88.825 million, according to details from the company’s unaudited financial statement released on the Nigerian Exchange (NGX).

The significant increase in the company’s bottom line was supported by higher revenue performance due to oil and gas income registered in the period. Its revenue came in at about 30% higher to $274.4 million at the end of 9 months of the financial year 2024, from $211.802 million in the comparable period.

The increase in revenue was a reflection of higher crude oil and gas sales, which masked the decline in refined products sales, CardinalStone Limited said in a note.

In the period, crude oil sales which came at $177.8 million accounted for 64.8% of total revenue; refined products of $81.6 million accounted for 29.7% of total revenue; and gas sales totaling $15.1 million contributed 5.6% to total revenue, analysts said.  Aradel Holdings export revenue grew by 77.2% year on year to $198.2 million, accounting for 72.2% of total revenue generated in the period.

Its unaudited financials further revealed that costs of sales climbed by 24.2% year on year to $114.743 million from $92.417 million at the end of 9M-2023 results. Analysts said the company’s increase costs of sales was driven by a 62.0% rise in crude oil handling charges to $42.1 million from $26.0 million in 9M-2023.

There was also additional pressures which emanated from 60.1% increase in royalties & other statutory expenses associated with FGN and NESS fees, according to CardinalStone.

In addition, analysts noted that the company reported stock adjustments – relating to the net movement in the value of inventory in the tank during the period – of $19.0 million, which helped to mitigate overall cost pressures during the period.

Aradel Holdings gross profit surged by 33.7% year on year to $159.664 million at the end of the period from $119.385 million in the comparable period. This translated to improved gross profit margin which settled at 58.2% from 56.4% 12 months ago.

Other losses moderated by more than 61% in the current period, from $29.927 million in 9M-2023 to $11.607 million at the end of 9m-2024. General and administrative expenses also fell by 9.3% year on year to $18.385 million from $20.272 million 12 months earlier.

This resulted in strong operating income for Aradel Holdings at $129.672 million at the end of 9M-2024 period, which is 87.4% above $69.186 million posted in the comparable period in 2023.

Net finance costs also declined by 92.8%, supported by the 52.0% reduction in finance costs due to lower bank borrowings along with improved finance income. Aradel Holdings reported a 125.9% year on year increase in pretax profit in the current period, settling at $145.336 million from $64.328 million in the equivalent period in 2023.

 The feat lifted pretax margin to 53.0% from 30.4% in the space of 12 months. The result showed that tax expense grew by 80.2% year on year to $56.5 million. Hence, the company profit after tax came in at $88.8 million, +169.4% above $32.976 billion 12 months ago. 

The company has also announced an interim dividend of N8.00 per share to be paid to shareholders. Aradel traded flat at N550.1 on the Nigerian Exchange after the earnings release after losing streaks. #Aradel Grows Profit by 169% to $88.8m, Declares Interim Dividend

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