Amaechi Raphael Chinedu

@Official_ARC·3h

Aradel's profit fell 82%. Its own adjusted number says up 134%. Which one counts?

Aradel Holdings' nine-month results tell two very different stories, depending on which profit line you read. Reported profit after tax, the official IFRS figure, fell 82% to ₦43.3bn from ₦245.1bn. The company also shows an adjusted figure of ₦572.4bn, up 134%. Same company, same nine months. The gap is one item: a ₦529.1bn charge for an "earn-out." What's an earn-out? When Renaissance, now part of the Aradel group, bought SPDC from Shell, part of the price wasn't fixed. The seller keeps getting paid from revenue on a defined set of SPDC's assets. The better those assets do, the more is owed. Here's how to read the two numbers: 1. Adjusted profit removes items a company sees as unusual, to show how the core business ran. Aradel's operations really did grow: production averaged 144,700 barrels of oil equivalent a day, against 24,000 a year ago. 2. Reported profit is what the accounting rules say was earned, and what earnings per share come from. Aradel's EPS fell to ₦32.57 from ₦55.90. 3. Ask whether the "unusual" item is really a one-off. This one isn't: Aradel paid ₦543.9bn in earn-out cash in nine months, still carries ₦1.318trn of the liability, and says it will keep accruing for the rest of 2026. The board is now asking the seller to review the deal. One more detail worth noticing: the ₦572.4bn adds the full charge back to group profit, with no tax adjustment. Where shareholders feel it: the interim dividend of $ARADEL is ₦7 per share, down from ₦10 last year. It qualifies on Nov 27 and is due to be paid Dec 7. The takeaway: adjusted profit can be a useful lens, but always find out what was taken out, and whether it will come back next quarter. Do you trust adjusted numbers, or go straight to the reported line? Tell us below 👇 Not financial advice.