Conoil Plc recorded a profit after tax of N3.90 billion in the first quarter of 2026, a 1,235.3 percent increase from the N292.1 million achieved in the same period of 2025. Revenue for the quarter fell 9.8 percent to N71.45 billion from N79.26 billion year-on-year, but cost of sales dropped more sharply by 17.7 percent to N60.84 billion, boosting gross profit to N10.61 billion from N5.32 billion. This drove the gross margin up to 14.9 percent from 6.7 percent, attributed to improved inventory management and pricing discipline.
Distribution expenses fell 55.8 percent to N527.3 million, supporting earnings, though administrative expenses rose 21.6 percent to N1.78 billion and finance costs nearly doubled to N4.10 billion from N2.29 billion. Profit before tax reached N4.20 billion, up from N372 million in Q1 2025. Tax expense was N303.4 million, resulting in the net profit of N3.90 billion, with earnings per share rising to 562 kobo from 42 kobo. Shareholders' funds grew to N43.14 billion from N39.24 billion due to retained earnings, which increased to N38.97 billion from N35.07 billion.
Total assets were N137.91 billion, down from N139.37 billion at the end of 2025. Inventories dropped 41.9 percent to N13.00 billion from N22.39 billion, while trade and other receivables rose 9.9 percent to N99.52 billion. Cash and bank balances declined to N12.30 billion from N12.91 billion. Total liabilities decreased by 5.3 percent to N94.77 billion from N100.13 billion, with short-term borrowings falling to N53.96 billion and trade payables dropping by over N4.3 billion to N36.48 billion. Net cash from operating activities surged to N4.43 billion from N269.6 million, aided by a N9.39 billion release from lower inventory, though offset by an N8.92 billion increase in receivables. Financing activities used N4.10 billion, mainly for interest payments, with no major capital expenditure. The company ended the quarter with a net cash inflow of N326.1 million. The share price rose from N187.2 on January 2 to N194, a 3.63 percent gain, placing Conoil 92nd on the NGX for year-to-date performance.
Conoil's profit surged while revenue fell and borrowings stayed high, exposing a reliance on cost cuts rather than sales growth. Investors are rewarding the company even as it extends more credit and holds far less cash than a year ago. The rising finance costs show the strain of high interest rates, yet the business model depends on sustaining tight inventory control. If credit sales keep rising without cash conversion, the current profitability may not be sustainable.
Editorial note: AI-assisted opinion, not established fact. Full disclaimer →
