Update shared on 22 Jun 2026 Executive Summary Analyst: Qudus Adebara (Research Analyst, DLM Capital Group) Aradel Holdings Plc delivered a landmark financial performance for the year ended December 31, 2025, supported by the acquisition of an additional 40% interest in ND Western Limited and increased exposure to Renaissance Africa Energy Company. The Group recorded a 20% increase in revenue to ₦699.4 billion, driven by stronger crude oil, gas, and refined product sales. More importantly, strategic acquisitions generated substantial one-off gains, including a ₦217.1 billion bargain purchase gain and ₦393.2 billion translation gain on business combination, resulting in Profit After Tax surging by 192% to ₦757.3 billion. The most striking development was the expansion of the balance sheet, with total assets increasing by 466% to ₦9.9 trillion, reflecting the consolidation of ND Western's assets and liabilities and the recognition of the Group's effective interest in Renaissance. The year marked a transformational shift in Aradel's scale, reserves base, production capacity, and long-term earnings potential. Financial Highlights – Statement of Profit or Loss (₦'000, Group) ₦'000 FY 2025 FY 2024 YoY % Revenue 699,430,701 581,151,376 +20% Cost of Sales (391,220,418) (224,632,552) +74% Gross Profit 308,210,283 356,518,824 -14% Dividend Income 4,157,900 144,965 +2,768% Other Income/(Loss) (89,655,792) (9,016,847) NM Gain on Bargain Purchase 217,100,328 - NM Translation Gain on Business Combination 393,187,789 - NM Operating Profit 733,581,019 291,402,990 +152% Net Finance Cost (8,089,174) (6,247,813) +29% Share of Profit from Associate 109,517,712 31,617,315 +246% Profit Before Tax 835,009,557 316,772,492 +164% Profit After Tax 757,342,748 259,072,447 +192% PAT Attributable to Owners 754,338,555 257,871,046 +193% EPS (₦) 173.62 59.35 +193% Revenue Performance Aradel's revenue growth was supported by stronger performance across all operating segments. Revenue by Product Segment Segment FY 2025 (₦'000) FY 2024 (₦'000) YoY % Crude Oil 440,093,785 373,662,426 +18% Gas 48,570,339 28,177,388 +72% Refined Products 210,766,577 179,311,562 +18% Total Revenue 699,430,701 581,151,376 +20% Crude Oil Business Crude oil remained the largest contributor, accounting for 63% of revenue. Production increased to 5.2 million barrels from 5.1 million barrels. Average production rose to 14.1 kbpd. Fastest-growing segment. Revenue increased 72% YoY. Gas production rose 59% to 18.8 Bcf. Daily production increased to 51.4 mmscf/day. Refining Operations Refined product revenue increased 18%. Refinery utilization improved to 49%. Refined product output rose to 313.4 million litres. Product sales volume increased 26% YoY. The Group continues to benefit from a diversified upstream and downstream energy portfolio. Profitability and Margins Gross Margin Pressure Despite revenue growth, gross profit declined 14% due to a sharp increase in production costs. Metric FY 2025 FY 2024 Gross Margin 44.1% 61.3% The increase in cost of sales reflects: Higher operating costs. Expanded production activities. Consolidation effects from acquired businesses. Exceptional Acquisition Gains Profitability was significantly enhanced by: Gain on bargain purchase: ₦217.1 billion. Translation gain on acquisition: ₦393.2 billion. Associate contribution: ₦109.5 billion. These strategic gains transformed operating earnings. Operating Profit Operating profit increased by 152% to ₦733.6 billion despite: Higher administrative expenses (+66%). Impairment charges of ₦6.3 billion. Foreign exchange-related losses. Profit after tax rose by 192% to ₦757.3 billion. EPS climbed to ₦173.62 from ₦59.35, reflecting substantial value creation for shareholders. Balance Sheet Overview (₦'000, Group) ₦'000 FY 2025 FY 2024 % Δ Total Assets 9,896,139,369 1,749,835,623 +466% Total Equity 2,148,276,043 1,404,109,963 +53% Total Liabilities 7,747,863,326 345,725,660 +2,141% Cash & Equivalents 1,504,676,469 411,801,252 +265% Inventories 82,898,380 46,902,252 +77% Property, Plant & Equipment 5,127,749,808 676,637,344 +658% The acquisition-driven expansion fundamentally altered the Group's scale. Asset Expansion Growth was driven by: Consolidation of ND Western assets. Recognition of Renaissance-related assets. Significant increases in petroleum assets and infrastructure. Liquidity Strength Cash balances rose to ₦1.5 trillion, providing: Strong operational flexibility. Capacity for future acquisitions. Funding for capital projects. Increased Leverage Borrowings increased substantially to finance growth initiatives and acquisitions. However, leverage remains supported by: Strong cash generation.

Significant equity growth. Expanding asset base. Cash Flow Highlights (₦'000, Group) ₦'000 FY 2025 FY 2024 Operating Cash Flow 208,066,879 304,572,472 Investing Cash Flow 680,530,238 (121,437,209) Financing Cash Flow 219,591,062 (113,791,183) Net Change in Cash 1,108,188,179 69,344,080 Closing Cash Balance 1,504,676,469 411,801,252 Key Observations Operating Activities Operating cash flow remained positive at ₦208.1 billion. Lower than prior year due to working capital requirements associated with expansion. Investing Activities Significant inflow of ₦680.5 billion. Driven primarily by: ₦832.5 billion net cash acquired through business combinations. ₦832.5 billion net cash acquired through business combinations. Financing Activities Additional borrowings of ₦503.8 billion. Dividend payments increased to ₦139.0 billion. Cash balance increased by ₦1.1 trillion. Reflects strong liquidity following transformational acquisitions. Key Ratios & Indicators (FY 2025) Metric Performance Revenue Growth +20% Operating Profit Growth +152% PBT Growth +164% PAT Growth +192% EPS Growth +193% Asset Growth +466% Equity Growth +53% Cash Growth +265% Strategic Insights Renaissance Transaction Changes Growth Profile The acquisition of additional ND Western interests materially increases Aradel's exposure to: Producing oil and gas assets. Midstream infrastructure. Export opportunities. Reserve replacement potential. Gas Becoming a Major Growth Driver Gas production growth of 59% demonstrates: Increasing contribution to earnings. Alignment with Nigeria's energy transition strategy. Diversification away from crude oil dependency. Refinery Optimization Continues Improved utilization levels indicate: Better operational efficiency. Increased downstream profitability. Opportunity for further margin expansion. Transformational increase in asset base. Strong profit growth. Significant exposure to high-quality energy assets. Robust liquidity position. Diversified upstream and downstream operations. Growing gas production platform. Strong contribution from associate investments. Declining gross margin due to rising production costs. Increased leverage following acquisitions. Heavy dependence on acquisition-related gains for earnings growth. Elevated foreign exchange exposure. Increased production from Renaissance assets. Expansion of domestic gas supply business. Higher refinery utilization rates. Reserve growth and exploration upside. Export market opportunities. Further consolidation within Nigeria's energy sector. Crude oil price volatility. Foreign exchange fluctuations. Regulatory changes in the petroleum industry. Environmental and decommissioning obligations. Security challenges in oil-producing regions. Rising operating and financing costs. Near-Term Outlook (12–18 Months) Management is expected to focus on: Integrating newly acquired assets. Optimizing Renaissance operations. Increasing gas production. Improving refinery utilization. Managing acquisition-related liabilities. Revenue growth should remain supported by larger production capacity and expanded reserves. Medium-Term Outlook (3–5 Years) Aradel is transitioning from a mid-sized indigenous producer into one of Nigeria's largest integrated energy groups. The enlarged asset portfolio, stronger reserve base, growing gas business, and enhanced liquidity position the Group for sustained earnings growth and increased shareholder value creation over the medium term. Analyst (Qudus Adebara) View Qudus Adebara commented that "Aradel Holdings delivered one of the most transformative performances in Nigeria's energy sector during FY 2025. While underlying operations remained strong, the ND Western acquisition and increased exposure to Renaissance fundamentally reshaped the company's scale and earnings profile. The sharp expansion in assets, cash reserves, and profit positions Aradel as a major beneficiary of Nigeria's evolving oil and gas landscape." Aradel Holdings Plc recorded a transformational FY 2025 performance, characterized by strong operational growth and a game-changing acquisition strategy. Revenue increased by 20%, profit after tax surged by 192%, and total assets expanded by 466% to ₦9.9 trillion. With a strengthened production base, rising gas output, significant liquidity, and enhanced exposure to Renaissance assets, the Group enters 2026 with a substantially larger platform for long-term growth and value creation. Have other thoughts on Aradel Holdings ? Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool. The user Wane_Investment_House holds no position in NGSE:ARADEL. Simply Wall St has no position in any of the companies mentioned. 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