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Aradel Holdings Plc reports revenues of ₦377.6 billion as at nine months 2024, up 206.9% | Declares ₦8.00 per share interim dividend, up 433.3%

Aradel Holdings Plc (“Aradel”, “Aradel Holdings”, “the Company” or “the Group”), Nigeria’s leading integrated indigenous energy Company, announces its unaudited Nine (9) months results for the period ended 30 September 2024.

The Chief Executive Officer of Aradel Holdings Plc, Mr. Adegbite Falade comments:

The Company’s performance in the first nine (9) months of 2024 consolidated on the strong operational and financial improvements attained in 2023. We achieved increased diversification of our revenue streams on significantly improved hydrocarbons production, and material increases in the output from our refinery operations. Wells 14 and 15 have now been drilled – and results have been favourable – concluding our Phase 1, 4-well turnkey drilling campaign. To accommodate the expected incremental volumes, we also expanded the throughput capacity of our evacuation channels. These activities, among others, put us in a position to maintain the output and efficiency levels for the nine months of the year.

Additionally, we completed the acquisition of the Olo and Olo West Marginal Fields from the TotalEnergies/NNPC Joint venture. This will further enhance our portfolio and create new opportunities for future production growth. This acquisition will complement our existing operations and provide significant long-term value, aligning with our broader strategy of expanding our asset base to multiple assets across different locations, and increasing the resilience of our business.

Our listing on the NGX bolsters liquidity of our shares and fulfils our promise to enhance shareholder value. We expect to close the year on a strong footing, barring any unforeseen circumstances.

In the light of the nine months performance, the Board has proposed the payment of interim dividend of 8 per share. The Interim Dividend of 8 per Ordinary Share of 0.50 each, (subject to appropriate withholding tax) will be paid to shareholders whose names appear in the Register of Shareholders as at the close of business on 20 November 2024.

Group Financial Highlights                 

30 September 2024

30 September 2023

Variance

₦’billion

₦’billion

%

Revenue

377.6

123.0

206.9

Gross Profit

210.8

69.4

203.9

Operating Profit

169.1

40.2

320.7

Operating Profit Margin

44.8%

32.7%

1211bps

EBITDA

238.1

62.3

281.9

EBITDA Margin

63.1%

50.7%

1239bps

Profit Before Tax

191.5

37.4

412.3

Profit After Tax

110.6

19.2

477.2

Earnings per Share

25.5

4.4

477.2

#

Operating Cashflow

213.5

93.4

128.6

Capital Expenditure

78.8

32.5

142.4

Free Cashflow

134.7

60.9

121.2

30 September 2024

31 December 2023

Variance

₦’billion

₦’billion

%

Total Assets

1,748.1

923.4

89.3

Total Equity

1,354.5

704.6

92.2

Operational Highlights

  • Production and Refining:
    • Crude oil production of 12,250 bbls/day up 37.7% (9M 2023: 8,893 bbls/day)
    • Gas production of 35.7 mmscfd (6,317 boepd) up by 60.6% (9M 2023: 22.4 mmscfd (3,949 boepd))
    • Refined petroleum products sold 148.6 mmltres up by 17.8% (9M 2023: 126.2 mmltres)
  • Average realised oil price per barrel of $85.9 (9M 2023: $77.0)
  • Average realised gas price per mscf of $1.6 (9M 2023: $1.9)
  • Underlying cash operating cost (boe) of $20 (9M 2023: $21)

Financial Review

Foreign exchange dynamics from the floating of the naira in 2023 continued to impact the financial performance of the Group. Average exchange rate in 9M 2024 was ₦1,431.21:US$1 relative to ₦596: US$1 in 9M 2023.

Revenue increased by 206.9% to ₦377.6 billion (9M 2023: ₦123.0 billion). This was driven by:

  • 349.9% increase in export crude oil revenue (66.6% of total revenue) to ₦251.6 billion (9M 2023 ₦55.9 billion; 45.5% of total), attributed to increased production levels, significant impact of improved utilisation of the Trans Niger Pipeline (TNP) on which there has been reduced crude losses, and additional value from the Alternative Crude Evacuation (ACE) route with resultant higher crude oil lifting of 2.1 mbbls in 9M 2024 (9M 2023: 1.3 mbbls).
  • Gas revenue recorded a 263.5% increase to ₦22.8 billion (6.0% of total revenue), due to higher production volumes (9M 2023: ₦6.3 billion; 5.1% of total revenue).
  • 69.5% increase in refined products’ revenue (27.3% of total revenue) to ₦103.1 billion (9M 2023: ₦60.8 billion; 49.4% of total revenue) due to increased production and sales volumes of 148.6 mmltres, up by 17.8% (9M 2023: 126.2 mmltres).

Cost of sales (COS) increased by 210.7% to ₦166.8 billion (9M 2023: ₦53.7 billion). This was primarily driven by:

  • Crude Handling Charges (38.8% of COS) which increased by 328.8% to ₦64.7 billion (9M 2023: ₦15.1 billion) arising from the higher activity levels across the Trans Niger Pipeline (TNP) and ACE operations. Crude oil theft as a percentage of production reduced by 100bps in 9M 2024 to 1.3% (9M 2023: 2.0%).
  • Depreciation (40.3% of COS) increased by 216.3% to ₦67.2 billion (9M 2023: ₦21.3 billion) due to higher hydrocarbon production with a depletion rate of 17.4% in 9M 2024 vs 12.3% as at 9M 2023, and addition of newly completed well costs.
  • Royalties & Other Statutory expenses (18.9% of COS) increased by 280.9% to ₦31.5 billion (9M 2023: ₦8.3 billion). This is attributable to higher production levels during the period.
  • Stock adjustment increased to a credit of ₦27.3 billion (9M 2023: ₦0.4 billion) due to higher inventory levels that are expected to be sold in Q4 2024.

General and Administrative (G&A) expenses increased by 113.4% to ₦25.1 billion (9M 2023: ₦11.7 billion). The major drivers of this growth include:

  • Repairs and Maintenance (10.1% of G&A expenses) increased by 678.6% to ₦2.5 billion as a result of increased maintenance activities on plants and production equipment (9M 2023: ₦0.3 billion).
  • Staff costs (33.4% of G&A expenses) increased by 192.7% to ₦8.4 billion (9M 2023: ₦2.9 billion) mainly due to staff additions and employee remuneration adjustments.
  • Professional Fees (11.5% of G&A expenses) increased to ₦2.9 billion, up 100.7% (9M 2023: ₦1.4 billion) primarily due to Naira devaluation.
  • Other expenses (21.1% of G&A expenses) increased by 45.5% to ₦5.3 billion (9M 2023: ₦3.6 billion).

Operating profit of ₦169.1 billion (9M 2023: ₦40.2 billion) bolstered by higher realised price as evidenced by increased revenue in 9M 2024 and moderately impacted by exchange loss resulting in 320.7% increase in 9M 2024.

Finance cost increased by 12.9% to ₦11.5 billion (9M 2023: ₦10.2 billion) driven primarily by naira devaluation which offset the decrease in the interest expense in US Dollar terms from the ongoing settlement of our loan obligations. Finance Income increased by 185.3% to ₦10.3 billion (9M 2023: ₦3.6 billion) resulting from amounts earned on invested cash and cash equivalents.

Profit before tax of ₦191.5 billion, up by 412.3% (9M 2023: ₦37.4 billion), with an Income tax expense estimate of ₦80.9 billion (Cash Tax ₦38.4 billion and Deferred tax ₦42.5 billion).

Profit after tax increased by 477.2% to ₦110.6 billion (9M 2023: ₦19.2 billion).

Year-to-date growth in total assets of 89.3% to ₦1.7 trillion (FY 2023: ₦923.4 billion) driven by:

  • Increase in Property, plant and equipment by 78.6% to ₦685.0 billion (FY 2023: ₦383.4 billion). This was impacted mainly by increased capital expenditure and higher FX rates.
  • Increase in the value of assets of ND Western, the Company’s associate, to ₦507.4 billion, up 87.8% year-to-date (FY 2023: ₦270.2 billion) due to share of profit and other comprehensive income for the period.

Total liabilities rose by 79.9% to ₦393.7 billion (FY 2023: ₦218.8 billion). This increase is attributable to higher tax liability estimates for the period and the Naira devaluation which caused a significant increase in translation differences.

Total equity increased by 92.2% to ₦1.4 trillion (FY 2023: ₦704.6 billion) primarily due to the retention of total comprehensive income over the period.

Cash flows from operating activities

The Company generated cash flows from operations of ₦228.9 billion as at 9M 2024, an increase of 130.5% (9M 2023: ₦99.3 billion), and net cash flows from operating activities of ₦213.5 billion was up 128.6% (9M 2023: ₦93.4 billion). This growth was buoyed by receipts of US$42 million from December 2023 crude oil sales, as well as steady improvement in crude oil and refinery product sales (and cash receipts).

Cash flows from investing activities

Net cash flows used in investing activities was N74.1 billion, up 137.0% (9M 2023: N31.3 billion). This increase is mainly driven by capital expenditure of ₦78.8 billion year-to-date (9M 2023: ₦32.5 billion) due to the ongoing 4-well drilling campaign, and the attendant foreign exchange effects.

Cash flows from financing activities

Net cash flows used in financing activities was N67.2 billion, up 93.6% (9M 2023: N34.7 billion), due to payment of a final dividend of N170 per share amounting to N36.9 billion for the year ended 31 December 2023 in the year.

Responsibility for publication

The Board member responsible for arranging the release of this announcement on behalf of Aradel Holdings is Adegbola Adesina, CFO Aradel Holdings Plc.

Signed:

Adegbola Adesina

Chief Financial Officer

Contact Information

Investors and analysts

Adegbola Adesina

Chief Financial Officer

Email: [email protected]

[email protected]

Investor Relations advisers

Værdi Investor Relations

Oluyemisi Lanre-Phillips

Email: [email protected]

Consolidated statement of profit or loss and other comprehensive income for the period ended 30 September 2024

In thousands of naira

30-Sep-2024

30-Sep-2023

Revenue

377,580,576

123,048,490

Cost of Sales

(166,802,254)

(53,690,581)

Gross Profit

210,778,322

69,357,909

Other Income/(Loss)

           (16,562,296)

           (17,386,389)

General and administrative expenses

(25,134,624)

(11,777,223)

Operating Profit

169,081,402

40,194,297

Finance Income

10,317,533

3,615,895

Finance Costs

(11,537,805)

(10,219,667)

Net Finance (cost)/income

(1,220,272)

(6,603,772)

Share of profit of an associate

23,596,359

3,781,469

Profit before taxation

191,457,489

37,371,994

Tax expense

(80,878,032)

(18,214,258)

Profit after taxation

110,579,457

19,157,736

Profit/(Loss) attributable to:

Equity holders of the parent

110,371,701

18,744,673

Non-controlling interest

207,756

413,063

110,579,457

19,157,736

Other comprehensive income:

Other comprehensive income item that may be reclassified to profit or loss in subsequent years (net of tax):

Foreign currency translation difference

362,312,934

143,734,999

Share of other comprehensive income of associate accounted for using the equity method

213,616,170

95,834,658

Net gain/(loss) on equity instruments at fair value through other comprehensive income

236,522

         2,163,997.00

Other comprehensive income for the year, net of tax

576,165,626

241,733,654

Total comprehensive income for the year

686,745,083

260,891,390

Total comprehensive income attributable to:

Equity holders of the parent

683,161,334

258,319,453

Non-controlling interest

3,583,749

2,571,937

Basic earnings per share

₦25.45

₦4.41

Consolidated statement of financial position as at 30 September 2024

In thousands of naira

30-Sep-2024

31-Dec-2023

Non-current assets

Property, plant, and equipment

684,882,549

383,427,621

Intangible assets

1,419,927

1,211,772

Financial assets

7,187,612

4,051,382

Investment in associate

507,445,825

270,233,296

Total non-current assets

1,200,935,913

658,924,071

Current assets

Inventories

47,808,299

15,973,244

Trade and other receivables

18,402,925

53,523,077

Prepayments

279,428

82,606

Financial assets

1,554,286

312,802

Cash and Bank

479,157,477

194,618,761

Total current assets

547,202,415

264,510,490

Total assets

1,748,138,328

923,434,561

Equities and Liabilities

Shareholders’ equity

Share capital

2,172,422

2,172,422

Share premium

22,819,670

22,819,670

Translation reserve

1,034,902,134

462,349,023

Fair value reserve of financial assets at FVOCI

2,765,309

2,528,787

Retained earnings

282,469,762

209,029,238

Non-controlling interest

9,329,190

5,745,441

Total shareholders’ equity

1,354,458,487

704,644,581

Non-current liabilities

Borrowings

47,584,316

44,350,154

Deferred tax liabilities

80,235,629

18,386,481

Decommissioning liabilities

119,351,402

65,161,229

Total non-current liabilities

247,171,347

127,897,864

Current liabilities

Trade and other payables

63,623,362

57,076,608

Contract liabilities

1,033,656

1,771,922

Taxation

51,430,343

14,421,838

Borrowings

30,421,133

17,621,748

Total Current liabilities

146,508,494

90,892,116

Total liabilities

393,679,841

218,789,980

Total equity & liabilities

1,748,138,328

923,434,561

Consolidated statement of cash flows for the period ended 30 September 2024

In thousands of naira

30-Sep-2024

30-Sep-2023

Profit before taxation

191,457,489

37,371,994

Adjustments:

Interest expense

11,537,805

10,219,667

Interest income

(10,317,533)

(3,615,895)

Dividend received

(137,110)

         (94,116)

Exchange loss

25,951,357

17,689,070

Share of profit from associate

(23,596,359)

(3,781,469)

Hedge cost in PorL

1,604,072

     2,062,408

Depreciation of property, plant and equipment

69,002,180

22,147,358

Provision no longer required

(63,883)

Stock adjustment

(27,323,852)

(454,311)

Asset Write off

     2,271,554

Operating cash flows before movement in working capital

238,114,166

83,816,260

Movement in working capital:

Decrease in trade and other receivables

35,120,152

39,831,762

(Increase)/ Decrease in prepayments

(196,822)

38,438

Increase in inventory

(4,511,203)

(1,146,990)

Increase in restricted cash

(9,809,928)

   (5,303,658)

Decrease in trade and other payables

(29,090,662)

(17,938,100)

Decrease in contract liabilities

(738,266)

                            

Cash generated by operating activities

228,887,437

99,297,712

Tax paid

(15,388,370)

(5,899,649)

Net cash flows from operating activities

213,499,067

93,398,063

Investing activities

Interest received

10,317,533

3,615,895

Dividend received

              137,110

           94,116

Purchase of property, plant and equipment

(78,789,790)

(32,503,942)

Proceeds from purchase of financial assets

(5,745,532)

   (2,457,726)

Net cash used in investing activities

(74,080,679)

(31,251,657)

Financing activities

Dividend paid

(36,931,177)

   (7,603,477)

Interest paid

(7,224,663)

(4,724,947)

Repayment of borrowing

(23,013,857)

(40,380,787)

Additional borrowings

                        

     7,687,600

Issue of Bond

                       

   10,318,000

Net cash flows used in financing activities

(67,169,697)

(34,703,611)

Increase in cash and cash equivalents

72,248,691

27,442,795

Cash and cash equivalents – Beginning of year

183,008,535

      55,520,654

Exchange rate effects on cash and cash equivalents

202,480,097

  48,218,526

Cash and cash equivalents – End of year

457,737,323

    131,181,975

Consolidated statement of profit or loss and other comprehensive income for the period

ended 30 September 2024 (US Dollars)

In thousands of dollars

30-Sep-2024

30-Sep-2023

Revenue

274,407

211,802

Cost of sales

(114,743)

(92,417)

Gross profit

159,664

119,385

Other Income/(Loss)

(11,607)

(29,927)

General and administrative expenses

(18,385)

(20,272)

Operating profit

129,672

69,186

Finance income

7,617

6,224

Finance costs

(8,440)

(17,591)

Net Finance (cost)/income

(823)

(11,367)

Share of profit of an associate

16,487

6,509

Profit before taxation

145,336

64,328

Tax expense

(56,511)

(31,352)

Profit after taxation

88,825

32,976

Profit/(Loss) attributable to:

Equity holders of the parent

88,579

32,265

Non-controlling interest

246

711

88,825

32,976

Other comprehensive income:

Net gain/loss on equity instruments at fair value through other comprehensive income

27

                    2,809

Other comprehensive income for the year, net of tax

27

                    2,809

Total comprehensive income for the year

88,852

35,785

Total comprehensive income attributable to:

Equity holders of the parent

88,606

35,074

Non-controlling interest

246

711

Basic earnings per share

$0.02

$0.01

Consolidated statement of financial position as at 30 September 2024 (US Dollars)

In thousands of dollars

30-Sep-2024

31-Dec-2023                

Non-current assets

Property, plant, and equipment

427,779

426,318

Intangible assets

888

1348

Financial assets

4,525

4,505

Investment in associate

316,950

300,463

Total non-current assets

750,142

732,634

Current assets

Inventories

29,860

17,759

Trade and other receivables

11,494

59,511

Prepayments

174

92

Financial assets

971

348

Cash and Bank

299,282

216,402

Total current assets

341,781

294,112

Total assets

1,091,923

1,026,746

Equities and Liabilities

Shareholders’ equity

Share capital

19,316

19,316

Share premium

78,955

78,955

Fair value reserve of financial assets at FVOCI

2,568

2541

Retained earnings

738,793

676,571

Non-controlling interest

5,827

5,581

Total shareholders’ equity

845,459

782,964

Non-current liabilities

Borrowings

30,292

49,830

Deferred tax liabilities

50,115

20,442

Decommissioning liabilities

74,547

72,451

Total non-current liabilities

154,954

142,723

Current liabilities

Trade and other payables

39,740

63,461

Contract liabilities

646

1,970

Taxation

32,123

16,035

Borrowings

19,001

19,593

Total Current liabilities

91,510

101,059

Total liabilities

246,464

243,782

Total equity & liabilities

1,091,923

1,026,746

Consolidated statement of cash flows for the period ended 30 September 2024 (US Dollars)

In thousands of dollars

30-Sep-2024

30-Sep-2023

Profit before taxation

145,336

64,328

Adjustments:

Interest expense

                8,440

            17,591

Interest income

              (7,617)

           (6,224)

Dividend received

                   (98)

               (162)

Exchange (gain)/loss

                18,133

            30,448

Share of profit from associate

              (16,487)

            (6,509)

Hedge cost in P or L

                1,159

             3,550

Depreciation of property, plant and equipment

             48,213

             38,122

Provision no longer required

                   (40)

Stock adjustment

              (18,970)

              (782)

Asset Write off

                          

              3,910

Operating cash flows before movement in working capital

            178,069

           144,272

Movement in working capital:

Decrease in trade and other receivables

                48,017

            51,813

(Increase)/ Decrease in prepayments

                  (82)

                   50

Decrease/ (Increase) in inventory

                 6,869

            (1,492)

Increase in restricted cash

                 (470)

            (2,081)

Decrease in trade and other payables

              (25,779)

             (6,618)

Decrease in contract liabilities

             (1,324)

                        

Cash generated by operating activities

            205,300

          185,944

Tax paid

              (10,752)

          (10,155)

Net cash flows from operating activities

           194,548

          175,789

Investing activities

Interest received

                 7,617

              6,224

Dividend received

                     98

                 162

Purchase of property, plant and equipment

              (49,212)

          (45,690)

Purchase of financial assets

              (3,595)

             (3,197)

Net cash used in investing activities

           (45,092)

         (42,501)

Financing activities

Dividend paid

              (26,357)

          (10,044)

Interest paid

              (5,320)

            (8,133)

Repayment of borrowing

              (16,080)

          (59,643)

Additional borrowings

                          

             10,000

Issue of Bond

                         

            13,393

Net cash flows used in financing activities

           (47,757)

         (54,427)

Increase in cash and cash equivalents

           101,699

            78,861

Cash and cash equivalents – Beginning of year

         203,493

          123,776

Exchange rate effects on cash and cash equivalents

           (19,289)

          (31,996)

Cash and cash equivalents – End of year

            285,903

          170,641

Definition of ratios

Operating profit margin is operating profit divided by total revenue.

EBITDA margin corresponds to EBITDA divided by total revenue.

Profit before tax corresponds to EBIT minus net finance (cost)/income and plus share of profit of associates and joint venture using the equity method.

Effective tax is income tax expense dividend by profit before income tax.

Profit before tax margin corresponds to Profit before Tax as a % of Revenue.

Return on equity corresponds to net profit reported to total equity.

Return on assets corresponds to net profit reported to total assets.

Return on ratio the return on total asset ratio indicates how well a company’s investment generate revenue.

Leverage refers to the amount of debt used to finance assets.

Glossary of terms

mmbbls – million barrels of oil

bscf – Billions of standard cubic feet of gas.

boepd – Barrels of Oil Equivalent Per Day

mscf – one thousand standard cubic feet

boe – Barrel of oil equivalent

bbl/d – barrels per day

Notes to editors

Aradel Holdings Plc (“Aradel Holdings” or “the Company”) is Nigeria’s foremost integrated independent energy company, delivering critical energy solutions in a sustainable and responsible way. Aradel Holdings was incorporated on 25 March 1992 (as the Midas Drilling Fund), changed its name to Niger Delta Exploration and Production Plc in November 1996, assumed its current name in May 2023, and was listed on the main board of the NGX on 14 October 2024.

The Company operates through its subsidiaries and an affiliate company:

  • Aradel Energy Limited (100%), a wholly owned subsidiary of Aradel Holdings, as well as the Operator of the Ogbele (PML 14), Omerelu (PPL 247), Olo and Olo West Marginal Fields, as well as OPL 227 joint venture (subject to NUPRC approval). Established to explore and harness opportunities in the energy industry.
  • Aradel Gas Limited (100%), the only Nigerian independent Non-JV Gas Supplier to Bonny LNG. Established to leverage investment opportunities in the gas sector. Has 100mmscf/d gas processing facility.
  • Aradel Investments Limited (100%), a wholly owned subsidiary established to hold and manage the group’s non-oil & gas assets. Established to hold the Company’s non-oil and gas investments.
  • Aradel Refineries Limited (95%), a 3-train 11kbbl/d independent operating midstream refinery. Produces AGO, DPK, MDO, HFO and Naphtha.
  • ND Western Limited (41.67%), an independent Nigerian oil and gas exploration and production company comprising four leading industry players with four limited liability companies (being Aradel Energy, Petrolin, First Exploration & Petroleum Development Company, and Waltersmith Petroman Oil) as shareholders.

For further information please refer to our website, aradel.com

Forward looking statements

Certain statements in this document may constitute forward-looking information or forward-looking statements under applicable Nigerian Securities laws (collectively “forward-looking statements”). Forward-looking statements are statements that relate to future events, including the Company’s future performance, opportunities, or business prospects. Any statements that express or involve discussions with respect to expectations, forecasts, assumptions, objectives, beliefs, projections, plans, guidance, predictions, future events or performance (often, but not always, identified by words such as “believes”, “seeks”, “anticipates”, “expects”, “continues”, “may”, “projects”, “estimates”, “forecasts”, “pending”, “intends”, “plans”, “could”, “might”, “should”, “will”, “would have” or similar words suggesting future outcomes) are not statements of historical fact and may be forward-looking statements.

By their nature, forward-looking statements involve assumptions, inherent risks and uncertainties, many of which are difficult to predict, and are usually beyond the control of management, that could cause actual results to be materially different from those expressed by these forward-looking statements. Undue reliance should not be placed on these forward-looking statements because the Company cannot assure that the forward-looking statements will prove to be correct. As forward-looking information address future conditions and events, they could involve risks and uncertainties including, but are not limited to, risk with respect to general economic conditions, regulations and taxes, civil unrest, corporate restructuring and related costs, capital and operating expenses, pricing and availability of financing and currency exchange rate fluctuations. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.

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