Market cap of Aradel Holdings drops by N650bn in four months

Despite an impressive first quarter ended March 2025 result and accounts, the market value of Aradel Holdings Plc, has depreciated by N650 billion in first four months of 2025 over investors profit-taking and sentiment trading.

Stock price of the integrated oil and gas service company listed on the Nigerian Exchange (NGX) closed for trading in 2024 at N598 per share, dropping by 25.08per cent or N150 per share to close April 30, 2025 at N448per share on the Nigerian Exchange Limited (NGX).

The company declared N67.2 billion profit Before Tax in first quarter (Q1) of 2025, about 70.1 per cent increase from N39.50 billion in Q1 2024, while profit after tax   closed Q1 2025 at N34.2 billion, representing an increase of 55.3 per cent from N22 billion declared in Q1 2024.

Aradel Holdings in 2024 financial year declared N316.8 billion profit before tax, an increase of 182.4 per cent from N112.2 billion in 2024.

On the backdrop of impressive performance, the management of the company declared a final dividend of N22.00 for every ordinary share of N0.50 each (bringing the total dividend for the financial year ended December 31, 2024, to N30.00 per share.

In 2024, the market value of Aradel Holdings dropped by N454.91 billion in 2024 when its was listed at N702.70 per share and close at N598.00 per share.

The stock price reached a peak of N820 per share the following day it was listed on Exchange over surge investors demand.

However, the momentum shifted on the third day as investors began selling off their shares. Aradel Holdings’ stock price dropped sharply, closing at N772per share, down from N820 per share.

The Exchange had announced the listing of Aradel Holdings’s 4,344,844,360 ordinary shares of 50 kobo each at N702.69 per share on its main board.

The listing marked a major milestone in the oil and gas sector’s participation in Nigeria’s stock market.

The sharp decline in Aradel Holdings’ stock price has raised concerns among investors, highlighting cautious sentiment in the market.

Capital market analysts have pointed out that Aradel Holdings’s decline in share price underscores the importance of investor caution trading.

They also suggest the swift decline in Aradel Holdings’ share price could be due to profit-taking by short-term investors.

 Additionally, long-term investors appear cautious, potentially due to liquidity concerns, as they assess the stock’s performance in a broader market context.

The Vice President, Highcap Securities Limited, Mr. David Adnori said the development reflects an increase in the number of shares due to the share split, stressing that the company is undergoing share correction on NGX.

He stated that the split has provided shareholders with additional shares, allowing them to realize profits in the period under review.

“At the new price level, many shareholders are taking profits. Additionally, it seems the stock may have been overpriced by the market or management, having been listed at N702.00 per share.”

He added that, “The drop in market value does not dwindling the company fundamentals.  It has maintained impressive corporate governance and investors are looking forward to half year results with the hope of an interim dividend, depending on management’s decisions.”

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