Aradel’s half-year profit grows far less than revenue as galloping costs bite

Aradel Holdings reported a dramatically higher turnover for January to June but saw no commensurate boost in earnings.

Within the period, global oil drillers generally cashed in on the sweeping supply chain disruption induced by the US-Israeli War against Iran. The oil and gas corporation, which last year completed a majority stake purchase in ND Western, an oil drilling firm where it previously held a non-controlling interest, expanded revenue nearly seven times to ₦2.5 trillion from ₦368.1 billion.

That sharp pace of growth could not be matched by after-tax profit, which climbed to ₦191 billion from ₦146.4 billion as exploding costs ate away at revenue.

Escalation in the Middle East, following the eruption of the war against Iran in February, has hindered a seamless supply of crude around the world, particularly through the Strait of Hormuz, a critical energy chokepoint that carries roughly 20 per cent of global petroleum and liquefied natural gas.

In consequence, oil price spikes are creating a bonanza for energy companies, with Big Oil like Exxon and Chevron reaping $26.5 billion in joint windfall off the back of the war, and Aradel’s local rival Seplat reporting a 430 per cent half-year profit surge on Thursday.