Eternal Oil Plc beat its Q1 2025 profit forecast, reporting a pre-tax profit of N1.4 billion, well above its projection of N756 million.
The strong result was mainly due to the absence of foreign exchange losses, a major turnaround from the N10.688 billion FX loss recorded in Q1 2024.
This improvement reflects the positive impact of FX stability on the company’s performance and signals a solid start to the year.
Other Key highlights (Q1 2025 vs. Q1 2024)
- Revenue: N73.272 billion +8.09% YoY
- Cost of sales: N68.959 billion +20.49% YoY
- Gross profit: N4.313 billion -59.14% YoY
- Finance cost: N468 million -41.45% YoY
- Profit after tax: N687 million -116.91% YoY
- Earnings per share: N0.53 +116.99% YoY
- Cash and cash equivalent: N4.768 billion -19.71%
- Total assets: N84.928 billion +25.96%
- Retained earnings; -N910 million -43.02%
- Shareholders’ Funds: N5.538 billion +14.17%
Insights
Eternal Oil Plc has kicked off 2025 with a win, at least on the surface. The company beat its own profit forecast for the first quarter, thanks largely to one key factor: the disappearance of its foreign exchange losses.
A year ago, FX pressures dragged the oil marketer deep into the red. This time, FX markets were calm, and that calm brought clarity to the bottom line.
- But scratch beneath the headline number, and the picture is less reassuring. The company’s mainstay fuel sales remain a volume game with little room for profit.
- Margins are wafer-thin, and as costs climbed faster than revenue, the pressure told. Gross profit and operating income both took a significant hit, reflecting the structural challenge of relying heavily on a product that barely covers its own cost.
- Eternal’s lubricants business, which carries better margins, still plays a minor role in its overall earnings story.
- While financing costs came down, offering some relief, core profitability continues to feel the squeeze.
- Cash generation has also softened, and retained earnings remain in negative territory. Even so, there are encouraging signs: the balance sheet is gaining strength, assets are growing, and shareholder equity is trending in the right direction. It’s clear the company is stabilizing slowly but surely.
The big takeaway for investors? Eternal Oil may have delivered a welcome earnings surprise, but it didn’t come from operational strength.
FX relief played the hero this time. For the rally to last, Eternal will need to do more to improve margins, build resilience, and shift away from an over-reliance on its low-margin fuel segment.
Eterna’s stock has been on a tear this year. It closed at N49.95 on April 30, 2025, marking a year-to-date gain of 106%, ranking it the 8th best performing stock on the NGX.
