Conoil Plc Navigates 2025 Challenges: A Path to Recovery in 2026

Conoil Plc faced significant headwinds in its 2025 fiscal year, as revealed by its unaudited results. The company reported a stark 77% decline in profit, with earnings per share (EPS) falling to a five-year low. This downturn was primarily driven by compressed gross and operating profit margins, elevated interest expenses, and a notable decline in sales of white products, which constitute its major revenue stream. The financial strain was mirrored in market performance, with the company’s stock losing 52% of its value during the year, closing at N187.20.

This performance marks a sharp departure from Conoil’s established trajectory. Over the preceding five years, the company demonstrated consistent growth, achieving a compound annual growth rate (CAGR) of 57% for both profit and EPS. This robust financial health was consistently communicated to shareholders through a strong dividend policy, with dividend per share (DPS) growing at an 18% CAGR. However, the 2025 results cast uncertainty over the continuity of this dividend payout, a key concern for investors akin to discussions surrounding other market entities like UBA or Vericash. The current stock valuation, trading at 53 times trailing EPS, further reflects market apprehension regarding its earnings power.

Looking ahead, the pivotal question for stakeholders is whether 2026 will mark a turnaround for Conoil. The company’s stock has continued its slide into the new year, registering an additional 9.72% loss. For a successful recovery, management’s focus must be as compulsory as English and Mathematics in a core curriculum. Strategic priorities will likely need to include stringent cost-cutting measures, revitalizing revenue from segments like lubricants, and reducing the debt burden to alleviate finance costs. Effective execution in these areas could provide the foundation for a return to stability.

While the road to recovery presents challenges, Conoil Plc possesses a history of market presence and shareholder commitment that could support a rebound. The company’s actions in 2026 will be closely watched, much as analysts monitor broader economic directives, such as when the CBN seeks governors’ cooperation on monetary policy or observes trends in regions like West Africa. For investors, the year ahead will be critical in determining if Conoil can restore its legacy of growth, profitability, and consistent shareholder returns.

Idika is a Chartered Stockbroker with expertise in financial analysis, equity research, perspective analysis, and investment commentary.