Eterna Oil Surpasses Q1 2025 Forecast with ₦1.4 Billion Pre-Tax Profit, Thanks to Zero FX Losses
Eternal Oil Plc, a key player in Nigeria’s downstream oil and gas sector, has exceeded market expectations in its Q1 2025 financial results, reporting a pre-tax profit of ₦1.4 billion, far ahead of the projected ₦756 million.
This impressive performance is largely attributed to a complete absence of foreign exchange (FX) losses, a marked contrast from the ₦10.7 billion loss recorded in the same period last year.
The announcement, released via the Nigerian Exchange (NGX), marks a significant turnaround for the company, which had been grappling with FX volatility and rising operational costs in previous quarters.
In Q1 2024, Eternal Oil recorded a debilitating FX loss of over ₦10 billion, primarily due to currency devaluation and foreign-denominated liabilities.
However, in Q1 2025, improved FX market conditions and prudent currency management strategies helped the company completely avoid FX losses, significantly boosting profitability.
“This result is a testament to disciplined financial oversight and the implementation of hedging strategies,” said a source familiar with the company’s operations.
While the FX gains boosted the bottom line, there were operational red flags:
• Gross profit fell 59%, as rising costs outpaced revenue growth.
• Cost of sales rose sharply by over 20%, indicating potential inefficiencies or higher input costs.
• Despite higher revenue, profit after tax dropped 53%, reflecting pressure on operating margins.
The company’s retained earnings also declined by 43%, raising questions about reinvestment capacity and dividend prospects.
Eternal Oil’s stock has performed exceptionally well in 2025. As of April 30, the share price closed at ₦49.95, delivering a 106% year-to-date return, making it the 8th best-performing stock on the Nigerian Exchange.
Market analysts attribute this performance to investor optimism following the company’s stronger balance sheet, improved FX outlook, and growth in total assets.
Despite strong headline profits, Eternal Oil faces challenges:
• Operational cost controls need tightening.
• Profitability beyond FX relief must be strengthened.
• Liquidity and capital reinvestment strategies will be key.
However, with improved macroeconomic stability, favorable oil market conditions, and ongoing infrastructure investments, the company is well-positioned to consolidate gains in the coming quarters.
Eternal Oil’s Q1 2025 report presents a classic case of mixed fortunes: a remarkable recovery from FX losses but persistent structural pressures. If the company can build on its financial stability and refine its operations, it could emerge as a leading force in Nigeria’s downstream sector.
