Aradel Holdings FY PAT up 361%

Integrated energy company Aradel Holdings has announced an impressive 361 per cent increase in its Profit After Tax (PAT) to 247.8 billion naira in 2024. The oil firm, which was part of the consortium involved in the acquisition of the assets of Shell Petroleum Development Company and subsequently listed on the NGX by introduction in October last year, also saw a remarkable 135.4 per cent rise in cash flows from operations during the year under review. Adegbite Falade, the CEO of Aradel Holdings, provided insights into the company's exceptional performance during a recent interview with CNBC Africa. Falade attributed the substantial growth in top-line revenue to the success of all three vertical revenue streams of the company. Particularly, the upstream segment experienced a significant 41 per cent growth, aided by price increments relative to the previous year. The addition of new wells in 2024 contributed incrementally to the growth in the upstream sector, further driving the overall revenue up. Despite the impressive financial results, Falade acknowledged the pressures on the cost of sales and operating expenses. He explained that the rise in production was a primary factor leading to increased costs, especially concerning crude handling, evacuation, and transportation expenses. However, he emphasized that the company effectively managed costs by optimizing operational efficiencies, which reflected in the positive lower margin results. The CEO also discussed the revenue composition of Aradel Holdings, highlighting that 64 per cent of revenues were derived from crude oil sales, while 31 per cent came from refined products and 5 per cent from gas production. Falade mentioned the ongoing growth in the gas business, despite a temporary containment in 2024 due to operational safety measures. He expressed optimism for increased gas production in 2025 by leveraging new and existing wells. Looking ahead, Falade outlined the company's projects for the year, notably the development of the Olo West and Omerelu fields. The strategic acquisition of the Olo West marginal field presents an opportunity for Aradel Holdings to expand its production capacity and further strengthen its position in the market. The CEO projected active production from these fields by the end of the year, paving the way for future growth and development. In terms of sector outlook, Falade echoed optimism for the oil and gas industry, citing positive regulatory reforms and initiatives that are expected to drive increased investment and production in 2025. He commended the government's efforts in providing a conducive business environment and fostering collaboration between industry players. Falade emphasized the sector's potential contribution to economic growth and energy security, especially with the country's refining capacity. Regarding investor perceptions, the CEO acknowledged the government's communication efforts to attract both domestic and international investors. He noted a renewed optimism among investors, supported by recent Final Investment Decisions (FIDs) in the industry. Falade reiterated the importance of delivering tangible results to solidify the industry's credibility and attract further investments. In conclusion, Aradel Holdings' stellar financial performance in FY2024 underscores the company's resilience and strategic vision amidst evolving market dynamics. With a robust outlook for the sector and ongoing operational initiatives, the energy firm is poised for sustained growth and value creation in the coming years.