Oando’s balance sheet weakens as liabilities top assets by N567bn

Oando Plc ended the 2025 financial year with negative shareholders’ equity of N566.97 billion after total liabilities rose above total assets, highlighting mounting balance-sheet pressure despite reporting a N204.81 billion profit.

This implies that the oil major also slipped into technical insolvency in 2025. The company’s audited financial statements show total liabilities climbed to N8.01 trillion at the end of December 2025 from N6.80 trillion a year earlier, while total assets stood at N7.45 trillion. The gap left shareholders’ funds in negative territory, worsening concerns about the group’s capital position.

The accounts indicate that total equity deteriorated to negative N566.97 billion from negative N360.98 billion in 2024, suggesting that the company’s liabilities exceeded its assets by more than half a trillion naira.

The pressure was also evident in Oando’s core operations. Revenue declined by 22.2 percent to N3.18 trillion from N4.09 trillion, while cost of sales exceeded revenue, resulting in a gross loss of N2.76 billion compared with a gross profit of N93.34 billion a year earlier. The figures suggest the company was unable to generate enough revenue from its core business to cover direct production costs.

Although Oando remained profitable, earnings weakened. Profit after tax fell to N204.81 billion from N220.12 billion, while profit attributable to shareholders declined by about nine percent to N204.01 billion from N224.86 billion.

READ ALSO: Again, Tinubu-led Oando slips into technical insolvency

Operating profit also fell sharply by nearly 58 percent to N240.96 billion from N569.68 billion, reflecting lower operating income. Other operating income dropped dramatically to N203.79 billion from N1.10 trillion, removing a major earnings support that had boosted the previous year’s performance.

The company’s financing burden remained significant. Finance costs surged to N394.69 billion from N235.84 billion, outpacing the increase in finance income and leaving net finance costs at N106.66 billion.

Short-term financial obligations also increased sharply. Current borrowings rose to N2.08 trillion from N1.31 trillion, while trade and other payables expanded to N4.08 trillion from N2.55 trillion, pushing total current liabilities to N6.60 trillion.

The balance sheet also showed erosion in key asset categories. Property, plant and equipment fell to N2.93 trillion from N3.17 trillion, intangible assets declined to N989.43 billion from N1.03 trillion, while finance lease receivables dropped to zero from N473.27 billion.

Despite these pressures, the company generated positive operating cash flow of N32.33 billion in 2025, reversing a cash outflow of N535.28 billion recorded in the previous year. Cash and cash equivalents also increased to N439.88 billion from N221.78 billion.

However, the improvement in liquidity came alongside increased reliance on short-term obligations, with total current liabilities rising by nearly 50 percent year-on-year, underscoring the funding pressures facing the energy company.

The combination of negative equity, a gross loss, declining revenue, rising short-term debt and weakening operating profit suggests Oando continues to face significant financial challenges, even as it remains profitable at the bottom line.