3 hours ago
24
Aradel Holdings (ARADEL) Plc recently released its Unaudited Financial Statements (UFS) for the twelve months ended 31 December (12M ‘24) 2024 to the market.
Sales revenue rises by 162.7% y/y. A close analysis of the results showed that Revenue (top line) rose sharply by 162.7% year-on-year (y/y) to settle at N581.02 billion, compared to the number achieved in 12M ‘23.
The growth in the top-line was largely driven by export on crude oil, which grew by 244.03% y/y to N37366bn, and contributed 64.3% (vs 49.0% in 12M ‘23) to the total revenue.
Other substantial contributor to the revenue is Refined products’ sales, which grew by 74.9% y/y to N179.31bn, and contributed 30.9% (vs 46.4% in 12M ’23) to the total revenue.
On the rear, Gas sales rose by 174.7% y/y to N28.05bn and contributed 4.8% (vs 4.6% in 12M ’23) to the total revenue.
Cost related items rises y/y Amid high crude oil handling charges and royalties/statutory expenses, costs incurred in generating revenue – ably represented by COGS rose by 231.5% y/y to N261.21 billion.
However, stock adjustments relating to the net movement in the value of inventory, put at N27.65 billion provided some respite to the elevated cost of sales.
As such, gross profit margin settled at 55.04% (vs 64.36% in 12M ’23). Elsewhere, following pressured Marketing & admin expenses (+164.4% y/y), Operating expenses (OPEX) spiked upward by 165.6% y/y, settling at N54.08 billion, thereby pushing OPEX margin to 9.31% (vs 9.21% in 12M ’23). Notwithstanding the +160.8% y/y growth recorded by operating profit, margins whittled down to 55.04%, compared to 64.36% achieved in 12M ’23, amid the upward pressures on above cost line items.
Down on the funding line, Net finance costs rose by 38.3% y/y to N7.07 billion, amid higher Finance cost paid on servicing existing obligations denominated in the US Dollar, put at N23.03 billion, which overshadowed Finance income put at N15.96 billion.
Bottom-line increases sturdily by 361.5% y/y On the bottom lines, pre-tax and post-tax profits lines posted healthy growths of +186.9% y/y and +361.5% y/y, settling at N321.84 billion and N248.03 billion, respectively, compared to 12M ’23 numbers. In summary, shareholders’ returns – ably represented by earnings per share (EPS) – on every N1.00 investment stands at N57.08 per share, compared to N12.37 posted in 12M ‘23.
We maintain Buy recommendation on ARADEL We have an existing 12-Month target price/fair value on ARADEL at N770.00 per share.
At our target price of N770.00, ARADEL offers an upside potential of 42.6% to the market when compared against N540.00 it closed on Tuesday, 28 January 2025. ARADEL currently has a PE of 9.46x, ROE of 17.81% and ROA of 14.21%, which are above the industry averages.
Based on the healthy performance posted above, we hereby maintain our BUY recommendation on the Company’s shares.
Kindly see the table below for the company’s detailed 12M-2024 performance highlights
English (US) ·