The negative equity position of Oando Plc worsened in 2025, with the company’s equity deficit widening from N361 billion the previous year to approximately N567 billion at year-end. Despite some progress in reducing retained losses and other negative reserves, new pressures—chiefly the recognition of treasury shares and a negative capital distribution reserve—further eroded the group’s capital base.
According to the audited financial report for the year ended December 2025, Oando’s equity was dragged down by the appearance of treasury shares, which added almost N379 billion in negative reserves, alongside another N78 billion negative capital distribution reserve. These developments more than offset significant reductions in retained deficit, down 69.7 per cent to N88.5 billion, and other negative reserves, which fell 22.4 per cent to N167.5 billion.
The company’s N205 billion profit for 2025 helped reduce the retained deficit, while a sharp reduction in foreign exchange losses helped narrow the negative balance in other reserves. However, these gains were overwhelmed by the impact of treasury shares—Oando’s own shares returned by a shareholder in settlement of an outstanding loan—which, by accounting convention, are deducted from equity and thus magnify the negative position. Part of the treasury shares were reclassified and distributed to existing shareholders, resulting in the negative capital distribution reserve.
With this deepening deficit, Oando’s shareholders effectively have no stake in its N7.44 trillion business. The company’s assets are now financed entirely—and then some—by liabilities, which expanded from N6.80 trillion in 2024 to N8.01 trillion at the end of 2025. The largest single stakeholder group is trade creditors, whose interest-free funding (trade and other payables) rose sharply to over N4 trillion, up from N2.55 trillion a year earlier. This group now finances 55 per cent of Oando’s balance sheet, making them the most exposed in the event of asset value losses, with no equity cushion to absorb shocks.
Long- and short-term borrowings totalled N2.7 trillion at year-end, with higher short-term debts offsetting reductions in long-term loans. Other major liabilities include current income tax liabilities (over N446 billion), deferred income tax liabilities (over N170 billion), long-term payables (nearly N112 billion), and retirement benefit obligations (around N93 billion).
Profitability and Persistent Challenges
Prospects for rebuilding equity through profit retention remain challenging, as operating difficulties persist. Oando’s three-year sales recovery faltered in 2025, with turnover dropping 22 per cent to N3.18 trillion. Cost of sales fell by a lesser 20 per cent to N3.18 trillion, resulting in a gross loss of about N2.8 billion—down sharply from a gross profit of over N93 billion in 2024.
Other income also disappointed, plunging from N1.1 trillion in 2024 to N203.8 billion in 2025. The prior year’s figure was buoyed by a N785 billion gain on bargain purchase, which was absent in 2025, and a fair value gain on quoted equity instruments of over N283 billion turned to a loss of over N90 million. Net foreign exchange gains also fell from N306 billion to below N68 billion.
Nonetheless, two major cost-saving measures helped turn a gross loss into an operating profit. The reversal of impairment on financial assets added N441.5 billion to earnings, compared to a net charge of over N76 billion the previous year. Administrative expenses were also slashed from N548 billion to N399 billion, saving over N149 billion.
These savings allowed Oando to post an operating profit of roughly N241 billion, though this was down from nearly N570 billion in 2024. Finance expenses on the group’s sizable debt portfolio increased from about N236 billion to N395 billion, but finance income surged more than sixfold to N288 billion, cutting net finance expenses from nearly N189 billion to N106.7 billion.
As a result, the company delivered a pre-tax profit of N135.8 billion, with an income tax credit of N69 billion boosting after-tax profit to N204.8 billion. Earnings per share improved to 23 kobo, up from 18 kobo in 2024.
Outlook
Despite the return to profitability, Oando’s negative equity position has deepened considerably. Rebuilding capital to positive territory will require several years of strong earnings, alongside a reversal of the structural challenges that continue to erode its balance sheet.
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