Tax Loss Amid Surging Finance Costs

Energy giant Oando Plc has delivered an eight per cent growth in net profit to N68.56bn for the half-year ended 30 June 2026, successfully navigating a steep N32.84bn pre-tax loss through a massive tax credit and a robust core operational recovery. The group’s unaudited interim financial statements submitted to the Nigerian Exchange Limited, endorsed by Group Chief Executive Jubril Tinubu and Group Chief Financial Officer Adeola Ogunsemi, show that Oando’s bottom line, which stood at N63.31bn in H1 2025, was heavily buoyed by a tax credit of N101.40bn. This tax relief cushioned the impact of massive debt-servicing obligations on the energy firm’s balance sheet. Operationally, the company demonstrated strong top-line momentum. Revenue expanded 20 per cent to N2.06tn from N1.72tn in the corresponding period of 2025. Despite cost of sales increasing from N1.70tn to N1.96tn, gross profit surged to N101.19bn, up significantly from N23.48bn in H1 2025. Supported by a rebound in other operating income to N48.52bn alongside controlled administrative overheads, Oando posted an operating profit of N127.84bn. The performance represents a dramatic turnaround from the N158.71bn operating loss recorded in H1 2025. However, heavy financing costs prevented those operational gains from flowing through to pre-tax earnings. Net finance expenses spiked to N161.30bn, driven by N167.58bn in finance costs and a sharp drop in finance income to N6.28bn from N158.99bn in the previous year. Addressing the financing overheads, group leadership noted that “while core asset performance and operational cash flows have improved significantly, high interest expenses and net finance costs continue to absorb operating profit before taxation.” Related News Fire service unveils mandatory warden training for organisations Climate change heightens security risks in Niger Delta, group warns RMAFC gives NUPRC 48 hours to dissolve host community trust The operational surge follows Oando’s aggressive upstream expansion, headlined by its landmark $783m acquisition of the Nigerian Agip Oil Company from Italian energy major Eni. The deal doubled Oando’s participating interests in Oil Mining Leases 60, 61, 62, and 63 to 40 per cent, adding 24 producing fields, extensive pipeline networks, and gas processing infrastructure. Consequently, average daily production rose 16 per cent year-on-year to 42,789 barrels of oil equivalent per day in H1 2026. Despite the expanded asset base and net profitability, structural balance sheet risks remain. Total liabilities stood at N8.42tn against total assets, keeping group net equity in a deficit position of N530.45bn. External auditors previously pointed to material uncertainties regarding Oando’s capital structure, cautioning that long-term stability depends on debt restructuring and revenue execution. Auditors stressed that reversing these pressures “is dependent on successful actions to raise capital to pay down the significant debt levels and through achievements of revenue forecasts.” Outlining its strategy on the NGX, management emphasized that “core asset optimisation remains the central pillar for long-term value creation.” Executive leadership stated that portfolio adjustments, targeted well-intervention campaigns, and disciplined capital expenditure will be prioritised to reduce total debt exposure and improve working capital. Jide Ajia Jide, a seasoned journalist with over 12-year experience, reports business-related stories