In a 2024 investor value showdown among Nigeria’s leading upstream oil companies, Oando Plc, Seplat Energy Plc, and Aradel Holdings Plc, each delivered vastly different outcomes depending on the metrics used.Investor Returns: Oando Tops in TSR, But Cash Flow Lags
Oando Plc delivered a staggering 528.6% total shareholder return (TSR) in 2024, driven almost entirely by soaring share price appreciation .
In comparison, Seplat Energy posted a robust 158.2% TSR, blending capital gains with substantial dividends (~N150.9 billion) .
Aradel Holdings, despite strong financial growth and a dividend payout of N130.35 billion, ended the year with a negative TSR of –23.4%, as its share price declined substantially .
However, a critical weakness in Oando was its negative operating cash flow per share, at –N43.88, translating to a cash flow yield of –84.4%, raising concerns about cash generation despite earnings momentum .
Profitability, Valuation & Leverage
Seplat Energy had operating cash flow yield of 13.95%, signalling healthy actual cash generation relative to its equity value .
Aradel outperformed peers in margins: reporting a net margin of 29.3% versus Seplat’s 4.9% in the first nine months of 2024 .
Despite modest net margin, Seplat delivered scale: revenue reached N1.65 trillion in 2024 (137% YoY growth) while Oando logged N4.11 trillion revenue but operated on thin margins and negative cash flow .
Valuation multiples also diverge sharply: Oando trades at a low EV-to-revenue multiple (~0.78×) and a P/E ratio of just ~2.7×, well below peer average (~16.8×)
Strategic Context and Sector Outlook
Seplat’s transformative $1.28 billion deal with ExxonMobil, finalized in December 2024, markedly expanded its upstream footprint, adding export terminals, gas infrastructure and boosting production capacity toward 120,000 barrels per day by late 2025 .
Aradel, while smaller in scale (EV of N1.86 trillion vs Seplat’s N3.25 trillion and Oando’s N3.20 trillion), demonstrated exceptional efficiency with a consistent net margin of nearly 30% in 2024 .
Peer Comparison
In 2024, Oando Plc delivered a remarkable total shareholder return (TSR) of 528.6%, outpacing its peers by a wide margin. This exceptional price rally reflected strong investor optimism about the company’s turnaround story. However, beneath the surface, Oando’s fundamentals revealed significant concerns. Despite generating approximately ₦4.11 trillion in revenue, the company posted a negative operating cash flow yield of –84.4%, highlighting a mismatch between its earnings growth and actual cash generation. Oando remains a high-growth energy player, but one grappling with liquidity strain and financial restructuring needs.
By contrast, Seplat Energy Plc maintained a balanced performance, combining growth with stability. Seplat recorded a solid 158.2% TSR in 2024, supported by healthy revenue of about ₦1.65 trillion and a positive operating cash flow yield of 13.95%. Seplat’s strategy reflects its role as a scale-driven operator with a strong dividend-paying culture, positioning it as a more conservative and sustainable option for investors seeking both capital appreciation and steady income.
Aradel Holdings Plc, on the other hand, delivered the sector’s highest profit margins—nearly 29% net margin—demonstrating operational excellence despite its smaller revenue base of around ₦580 billion. However, its share price lagged, posting a negative TSR of 23.4% for the year. Aradel’s story is one of strong financial discipline and profitability, but with limited market enthusiasm reflected in its stock price.
Oando Offers Growth, But at Higher Risk
Short‑term investor return: Oando leads the pack in price performance for 2024, though this came without generating positive operating cash flow.
Dividend and cash yield: Seplat offers steady dividend-based income and healthier cash flow, making it more income-focused investor-friendly.
Profit efficiency: Aradel, despite lower scale, leads in margin efficiency and operational profitability, though its stock performance disappointed in 2024.
For investors, Oando presents a high-risk, high-return story, driven by expansion and perceived turnaround potential. Seplat offers balanced growth with consistent cash flows, while Aradel offers operational efficiency but has underperformed on market sentiment.
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