Resilience Amid Economic Transition: How Conoil Sustained Profitability in Nigeria’s Challenging 2025 Downstream Market

Eromosele Abiodun

The 2025 financial year will likely be remembered as one of the most transformative periods in Nigeria’s downstream petroleum industry. 

The continued implementation of market-based fuel pricing, changing supply-chain dynamics, and increasing domestic refining capacity reshaped competitive conditions across the sector.

While these structural reforms are expected to strengthen the long-term sustainability of Nigeria’s energy market, the transition period created significant operational and financial pressures for downstream operators. 

Rising borrowing costs, inflationary pressures, fluctuating product prices, and evolving consumer demand patterns combined to compress margins across the industry.

Against this backdrop, Conoil delivered a profitable performance and demonstrated notable operational resilience despite a difficult business environment.

The key financial highlights  revealed that revenue closed at N301.72 billion in 2025 from N323,13 billion in 2024. For the year ended December 31, 2025, Conoil recorded revenue of N301.72 billion,

The revenue  generated in 2025 reflected the company’s ability to maintain significant market activity despite changing industry conditions. The result underscores the strength of the company’s nationwide distribution network and established presence across retail, commercial, and industrial market segments. 

 In the year under review,  gross profit stood at N22.68 billion from N26.35 billion in 2024. 

The indigenous petroleum market, however, declared N2.68 billion profit before tax in 2025 while profit before tax was at N2.68 billion in 2025. The management in the 2025 financial year has proposed a dividend of 200 Kobo per share.  

The proposed distribution reflects management’s confidence in the business while balancing the need to preserve capital and support future growth initiatives. For shareholders, the recommendation represents continuity in returns during a period when many companies have adopted more conservative capital allocation strategies in response to economic uncertainty.

Cost Management Supports Earnings

One of the notable features of Conoil’s 2025 performance was its focus on cost efficiency.  Cost of sales declined to N279.04 billion from N296.77 billion in the preceding year, while distribution and marketing expenses reduced significantly to N4.05 billion from

N6.89 billion in 2024. These improvements helped the company generate gross profit of N22.68 billion and partially offset the impact of a challenging operating environment.

Strategic Expansion, Asset Growth

The company also continued to invest in its operational capacity. Total assets increased by 21.2per cent to N139.37 billion in 2025 from N114.95 billion in 2024, while property, plant and equipment rose substantially to N10.81 billion from N3.97 billion in the prior year. This expansion reflects ongoing investment in infrastructure and operational assets intended to support future business growth.Trade and other receivables increased to N90.59 billion, suggesting a higher level of credit exposure associated with business expansion and customer support initiatives.

Financing Costs as Industry Challenge

Perhaps the most significant challenge confronting many businesses during 2025 was the elevated cost of borrowing.

Conoil was not insulated from this pressure. Finance costs increased by 162.5per cent to N10.78 billion, while total borrowings rose to N54.24 billion as the company sought to support working-capital requirements and maintain product availability.

The increase in financing costs had a direct impact on net profitability, reducing earnings despite strong revenue performance and improved operating efficiency.

Positive Fourth-quarter Momentum

The fourth quarter provided encouraging signs for investors and market observers. Conoil reported fourth-quarter revenue of N97.89 billion and Profit After Tax of N544.67million, representing a significant improvement compared with the corresponding period of the previous year.

The performance suggests that management’s operational adjustments and cost-control initiatives may be gaining traction as the industry adapts to the evolving market structure.

Surmounting Challenges

The 2025 financial year tested the resilience of businesses across Nigeria’s downstream petroleum sector. High financing costs, market restructuring, and economic pressures created a demanding operating environment.

Within this context, Conoil demonstrated an ability to sustain revenue generation, improve cost efficiency, expand its asset base, and remain profitable despite significantly higher financing expenses.

While challenges remain, particularly regarding borrowing costs and working-capital management, the company’s performance suggests that it has maintained a solid operational foundation from which to navigate the next phase of Nigeria’s evolving energy market.

As industry conditions continue to stabilize and domestic refining capacity expands, market participants will be watching closely to see how companies such as Conoil position themselves for long-term growth in a more competitive and increasingly market-driven environment.