Nigeria’s three oil marketing companies listed on the Nigerian Exchange adopted sharply contrasting funding strategies in the first half of 2026 as they navigated a high-interest-rate environment, with Conoil Plc increasing debt by 31 per cent, Eterna Plc deleveraging through a major equity raise and TotalEnergies Marketing Nigeria Plc reducing borrowings to cut finance costs despite a broader recovery in earnings.An analysis byThe PUNCHof the unaudited half-year financial statements of Conoil, Eterna and TotalEnergies showed that all three marketers returned stronger profits during the period but pursued strikingly different capital allocation strategies as they adapted to the realities of downstream deregulation and elevated financing costs.The divergent approaches came against the backdrop of moderating petrol demand.The PUNCHreported on Tuesday that Nigeria’s petrol consumption fell by 52 million litres, or 0.56 per cent, in the first six months of 2026 as higher pump prices following subsidy removal moderated demand despite increased domestic refining capacity.The H1 financial statements showed that Conoil expanded its reliance on debt to support operations, Eterna strengthened its balance sheet through fresh equity while repaying borrowings, and TotalEnergies reduced debt exposure, lowering its finance costs and improving earnings quality.Finance costs among the three marketers totalled N18.51bn in the first half of 2026, down 5.2 per cent from N19.52bn recorded in the corresponding period of 2025, but this does not paint the full picture.The aggregate masked sharply contrasting trends. While Conoil and Eterna’s combined finance costs surged 76.4 per cent to N9.78bn from N5.54bn, TotalEnergies reduced its finance bill by 37.5 per cent to N8.73bn from N13.98bn, offsetting much of the increase recorded by its peers.ConoilConoil’s financial statements showed the company increased borrowings as it sought to finance growing working capital requirements. Its bank overdraft rose by 31.2 per cent to N72.05bn as of June 2026 from N54.90bn at the end of December 2025, while the effective borrowing rate remained at about 32 per cent per annum.The higher debt burden pushed finance costs up 74.1 per cent to N8.29bn in H1 2026 from N4.76bn a year earlier. Although revenue increased 25.2 per cent to N179.90bn and gross profit jumped 64.8 per cent to N18.72bn, finance costs absorbed about 44.3 per cent of gross profit, compared with 41.9 per cent in the corresponding period of 2025.Profit after tax nevertheless rose 473 per cent to N5.15bn, reflecting stronger operating performance despite the heavier financing burden.EternaUnlike Conoil, Eterna embarked on a balance-sheet restructuring during the period. The company raised about N18.97bn through an equity issue, lifting share premium from N5.80bn to N24.33bn and more than quadrupling shareholders’ equity to N31.53bn.The fresh capital enabled Eterna to cut total borrowings by 57.5 per cent to N29.45bn as of June 2026 from N69.31bn at the end of 2025.Despite the sharp reduction in debt, finance costs increased 90.5 per cent to N1.49bn from N782.75m because the company carried higher debt for a significant part of the reporting period before the recapitalisation took full effect.Revenue climbed 37.9 per cent to N217.31bn, while operating profit surged to N8.78bn from N2.34bn. Profit after tax jumped 1,374 per cent to N5.88bn from N399m. The company’s interest coverage also improved significantly, with operating profit covering finance costs about 5.9 times, indicating stronger debt-servicing capacity.TotalEnergiesTotalEnergies adopted a different strategy by reducing debt without raising fresh equity. The company’s bank overdraft declined 12.8 per cent to N73.86bn from N84.67bn, while it added no new borrowings during the period and repaid N10.81bn of existing debt.Related NewsNDLEA, Army seize 604.5kg cannabis, hunt Edo drug kingpinVisa processing shift won’t affect Abuja embassy operations – USMTN Nigeria spent N1.63tn on CAPEX – CFOIts average overdraft interest rate stood at approximately 18 per cent, substantially lower than Conoil’s effective borrowing cost. The lower debt burden reduced finance costs by 37.5 per cent to N8.73bn from N13.98bn.Revenue rose modestly by 4.7 per cent to N443.99bn, but operating profit increased 40.8 per cent to N14.52bn from N10.32bn.The reduction in finance costs helped the company return to profitability, posting a profit after tax of N4.95bn, compared with a N2.86bn loss in the corresponding period of 2025. Interest coverage improved to 1.66 times from 0.74 times a year earlier.Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” An analysis byThe PUNCHof the unaudited half-year financial statements of Conoil, Eterna and TotalEnergies showed that all three marketers returned stronger profits during the period but pursued strikingly different capital allocation strategies as they adapted to the realities of downstream deregulation and elevated financing costs.The divergent approaches came against the backdrop of moderating petrol demand.The PUNCHreported on Tuesday that Nigeria’s petrol consumption fell by 52 million litres, or 0.56 per cent, in the first six months of 2026 as higher pump prices following subsidy removal moderated demand despite increased domestic refining capacity.The H1 financial statements showed that Conoil expanded its reliance on debt to support operations, Eterna strengthened its balance sheet through fresh equity while repaying borrowings, and TotalEnergies reduced debt exposure, lowering its finance costs and improving earnings quality.Finance costs among the three marketers totalled N18.51bn in the first half of 2026, down 5.2 per cent from N19.52bn recorded in the corresponding period of 2025, but this does not paint the full picture.The aggregate masked sharply contrasting trends. While Conoil and Eterna’s combined finance costs surged 76.4 per cent to N9.78bn from N5.54bn, TotalEnergies reduced its finance bill by 37.5 per cent to N8.73bn from N13.98bn, offsetting much of the increase recorded by its peers.ConoilConoil’s financial statements showed the company increased borrowings as it sought to finance growing working capital requirements. Its bank overdraft rose by 31.2 per cent to N72.05bn as of June 2026 from N54.90bn at the end of December 2025, while the effective borrowing rate remained at about 32 per cent per annum.The higher debt burden pushed finance costs up 74.1 per cent to N8.29bn in H1 2026 from N4.76bn a year earlier. Although revenue increased 25.2 per cent to N179.90bn and gross profit jumped 64.8 per cent to N18.72bn, finance costs absorbed about 44.3 per cent of gross profit, compared with 41.9 per cent in the corresponding period of 2025.Profit after tax nevertheless rose 473 per cent to N5.15bn, reflecting stronger operating performance despite the heavier financing burden.EternaUnlike Conoil, Eterna embarked on a balance-sheet restructuring during the period. The company raised about N18.97bn through an equity issue, lifting share premium from N5.80bn to N24.33bn and more than quadrupling shareholders’ equity to N31.53bn.The fresh capital enabled Eterna to cut total borrowings by 57.5 per cent to N29.45bn as of June 2026 from N69.31bn at the end of 2025.Despite the sharp reduction in debt, finance costs increased 90.5 per cent to N1.49bn from N782.75m because the company carried higher debt for a significant part of the reporting period before the recapitalisation took full effect.Revenue climbed 37.9 per cent to N217.31bn, while operating profit surged to N8.78bn from N2.34bn. Profit after tax jumped 1,374 per cent to N5.88bn from N399m. The company’s interest coverage also improved significantly, with operating profit covering finance costs about 5.9 times, indicating stronger debt-servicing capacity.TotalEnergiesTotalEnergies adopted a different strategy by reducing debt without raising fresh equity. The company’s bank overdraft declined 12.8 per cent to N73.86bn from N84.67bn, while it added no new borrowings during the period and repaid N10.81bn of existing debt.Related NewsNDLEA, Army seize 604.5kg cannabis, hunt Edo drug kingpinVisa processing shift won’t affect Abuja embassy operations – USMTN Nigeria spent N1.63tn on CAPEX – CFOIts average overdraft interest rate stood at approximately 18 per cent, substantially lower than Conoil’s effective borrowing cost. The lower debt burden reduced finance costs by 37.5 per cent to N8.73bn from N13.98bn.Revenue rose modestly by 4.7 per cent to N443.99bn, but operating profit increased 40.8 per cent to N14.52bn from N10.32bn.The reduction in finance costs helped the company return to profitability, posting a profit after tax of N4.95bn, compared with a N2.86bn loss in the corresponding period of 2025. Interest coverage improved to 1.66 times from 0.74 times a year earlier.Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” The divergent approaches came against the backdrop of moderating petrol demand.The PUNCHreported on Tuesday that Nigeria’s petrol consumption fell by 52 million litres, or 0.56 per cent, in the first six months of 2026 as higher pump prices following subsidy removal moderated demand despite increased domestic refining capacity.The H1 financial statements showed that Conoil expanded its reliance on debt to support operations, Eterna strengthened its balance sheet through fresh equity while repaying borrowings, and TotalEnergies reduced debt exposure, lowering its finance costs and improving earnings quality.Finance costs among the three marketers totalled N18.51bn in the first half of 2026, down 5.2 per cent from N19.52bn recorded in the corresponding period of 2025, but this does not paint the full picture.The aggregate masked sharply contrasting trends. While Conoil and Eterna’s combined finance costs surged 76.4 per cent to N9.78bn from N5.54bn, TotalEnergies reduced its finance bill by 37.5 per cent to N8.73bn from N13.98bn, offsetting much of the increase recorded by its peers.ConoilConoil’s financial statements showed the company increased borrowings as it sought to finance growing working capital requirements. Its bank overdraft rose by 31.2 per cent to N72.05bn as of June 2026 from N54.90bn at the end of December 2025, while the effective borrowing rate remained at about 32 per cent per annum.The higher debt burden pushed finance costs up 74.1 per cent to N8.29bn in H1 2026 from N4.76bn a year earlier. Although revenue increased 25.2 per cent to N179.90bn and gross profit jumped 64.8 per cent to N18.72bn, finance costs absorbed about 44.3 per cent of gross profit, compared with 41.9 per cent in the corresponding period of 2025.Profit after tax nevertheless rose 473 per cent to N5.15bn, reflecting stronger operating performance despite the heavier financing burden.EternaUnlike Conoil, Eterna embarked on a balance-sheet restructuring during the period. The company raised about N18.97bn through an equity issue, lifting share premium from N5.80bn to N24.33bn and more than quadrupling shareholders’ equity to N31.53bn.The fresh capital enabled Eterna to cut total borrowings by 57.5 per cent to N29.45bn as of June 2026 from N69.31bn at the end of 2025.Despite the sharp reduction in debt, finance costs increased 90.5 per cent to N1.49bn from N782.75m because the company carried higher debt for a significant part of the reporting period before the recapitalisation took full effect.Revenue climbed 37.9 per cent to N217.31bn, while operating profit surged to N8.78bn from N2.34bn. Profit after tax jumped 1,374 per cent to N5.88bn from N399m. The company’s interest coverage also improved significantly, with operating profit covering finance costs about 5.9 times, indicating stronger debt-servicing capacity.TotalEnergiesTotalEnergies adopted a different strategy by reducing debt without raising fresh equity. The company’s bank overdraft declined 12.8 per cent to N73.86bn from N84.67bn, while it added no new borrowings during the period and repaid N10.81bn of existing debt.Related NewsNDLEA, Army seize 604.5kg cannabis, hunt Edo drug kingpinVisa processing shift won’t affect Abuja embassy operations – USMTN Nigeria spent N1.63tn on CAPEX – CFOIts average overdraft interest rate stood at approximately 18 per cent, substantially lower than Conoil’s effective borrowing cost. The lower debt burden reduced finance costs by 37.5 per cent to N8.73bn from N13.98bn.Revenue rose modestly by 4.7 per cent to N443.99bn, but operating profit increased 40.8 per cent to N14.52bn from N10.32bn.The reduction in finance costs helped the company return to profitability, posting a profit after tax of N4.95bn, compared with a N2.86bn loss in the corresponding period of 2025. Interest coverage improved to 1.66 times from 0.74 times a year earlier.Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” The H1 financial statements showed that Conoil expanded its reliance on debt to support operations, Eterna strengthened its balance sheet through fresh equity while repaying borrowings, and TotalEnergies reduced debt exposure, lowering its finance costs and improving earnings quality.Finance costs among the three marketers totalled N18.51bn in the first half of 2026, down 5.2 per cent from N19.52bn recorded in the corresponding period of 2025, but this does not paint the full picture.The aggregate masked sharply contrasting trends. While Conoil and Eterna’s combined finance costs surged 76.4 per cent to N9.78bn from N5.54bn, TotalEnergies reduced its finance bill by 37.5 per cent to N8.73bn from N13.98bn, offsetting much of the increase recorded by its peers.ConoilConoil’s financial statements showed the company increased borrowings as it sought to finance growing working capital requirements. Its bank overdraft rose by 31.2 per cent to N72.05bn as of June 2026 from N54.90bn at the end of December 2025, while the effective borrowing rate remained at about 32 per cent per annum.The higher debt burden pushed finance costs up 74.1 per cent to N8.29bn in H1 2026 from N4.76bn a year earlier. Although revenue increased 25.2 per cent to N179.90bn and gross profit jumped 64.8 per cent to N18.72bn, finance costs absorbed about 44.3 per cent of gross profit, compared with 41.9 per cent in the corresponding period of 2025.Profit after tax nevertheless rose 473 per cent to N5.15bn, reflecting stronger operating performance despite the heavier financing burden.EternaUnlike Conoil, Eterna embarked on a balance-sheet restructuring during the period. The company raised about N18.97bn through an equity issue, lifting share premium from N5.80bn to N24.33bn and more than quadrupling shareholders’ equity to N31.53bn.The fresh capital enabled Eterna to cut total borrowings by 57.5 per cent to N29.45bn as of June 2026 from N69.31bn at the end of 2025.Despite the sharp reduction in debt, finance costs increased 90.5 per cent to N1.49bn from N782.75m because the company carried higher debt for a significant part of the reporting period before the recapitalisation took full effect.Revenue climbed 37.9 per cent to N217.31bn, while operating profit surged to N8.78bn from N2.34bn. Profit after tax jumped 1,374 per cent to N5.88bn from N399m. The company’s interest coverage also improved significantly, with operating profit covering finance costs about 5.9 times, indicating stronger debt-servicing capacity.TotalEnergiesTotalEnergies adopted a different strategy by reducing debt without raising fresh equity. The company’s bank overdraft declined 12.8 per cent to N73.86bn from N84.67bn, while it added no new borrowings during the period and repaid N10.81bn of existing debt.Related NewsNDLEA, Army seize 604.5kg cannabis, hunt Edo drug kingpinVisa processing shift won’t affect Abuja embassy operations – USMTN Nigeria spent N1.63tn on CAPEX – CFOIts average overdraft interest rate stood at approximately 18 per cent, substantially lower than Conoil’s effective borrowing cost. The lower debt burden reduced finance costs by 37.5 per cent to N8.73bn from N13.98bn.Revenue rose modestly by 4.7 per cent to N443.99bn, but operating profit increased 40.8 per cent to N14.52bn from N10.32bn.The reduction in finance costs helped the company return to profitability, posting a profit after tax of N4.95bn, compared with a N2.86bn loss in the corresponding period of 2025. Interest coverage improved to 1.66 times from 0.74 times a year earlier.Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” Finance costs among the three marketers totalled N18.51bn in the first half of 2026, down 5.2 per cent from N19.52bn recorded in the corresponding period of 2025, but this does not paint the full picture.The aggregate masked sharply contrasting trends. While Conoil and Eterna’s combined finance costs surged 76.4 per cent to N9.78bn from N5.54bn, TotalEnergies reduced its finance bill by 37.5 per cent to N8.73bn from N13.98bn, offsetting much of the increase recorded by its peers.ConoilConoil’s financial statements showed the company increased borrowings as it sought to finance growing working capital requirements. Its bank overdraft rose by 31.2 per cent to N72.05bn as of June 2026 from N54.90bn at the end of December 2025, while the effective borrowing rate remained at about 32 per cent per annum.The higher debt burden pushed finance costs up 74.1 per cent to N8.29bn in H1 2026 from N4.76bn a year earlier. Although revenue increased 25.2 per cent to N179.90bn and gross profit jumped 64.8 per cent to N18.72bn, finance costs absorbed about 44.3 per cent of gross profit, compared with 41.9 per cent in the corresponding period of 2025.Profit after tax nevertheless rose 473 per cent to N5.15bn, reflecting stronger operating performance despite the heavier financing burden.EternaUnlike Conoil, Eterna embarked on a balance-sheet restructuring during the period. The company raised about N18.97bn through an equity issue, lifting share premium from N5.80bn to N24.33bn and more than quadrupling shareholders’ equity to N31.53bn.The fresh capital enabled Eterna to cut total borrowings by 57.5 per cent to N29.45bn as of June 2026 from N69.31bn at the end of 2025.Despite the sharp reduction in debt, finance costs increased 90.5 per cent to N1.49bn from N782.75m because the company carried higher debt for a significant part of the reporting period before the recapitalisation took full effect.Revenue climbed 37.9 per cent to N217.31bn, while operating profit surged to N8.78bn from N2.34bn. Profit after tax jumped 1,374 per cent to N5.88bn from N399m. The company’s interest coverage also improved significantly, with operating profit covering finance costs about 5.9 times, indicating stronger debt-servicing capacity.TotalEnergiesTotalEnergies adopted a different strategy by reducing debt without raising fresh equity. The company’s bank overdraft declined 12.8 per cent to N73.86bn from N84.67bn, while it added no new borrowings during the period and repaid N10.81bn of existing debt.Related NewsNDLEA, Army seize 604.5kg cannabis, hunt Edo drug kingpinVisa processing shift won’t affect Abuja embassy operations – USMTN Nigeria spent N1.63tn on CAPEX – CFOIts average overdraft interest rate stood at approximately 18 per cent, substantially lower than Conoil’s effective borrowing cost. The lower debt burden reduced finance costs by 37.5 per cent to N8.73bn from N13.98bn.Revenue rose modestly by 4.7 per cent to N443.99bn, but operating profit increased 40.8 per cent to N14.52bn from N10.32bn.The reduction in finance costs helped the company return to profitability, posting a profit after tax of N4.95bn, compared with a N2.86bn loss in the corresponding period of 2025. Interest coverage improved to 1.66 times from 0.74 times a year earlier.Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” The aggregate masked sharply contrasting trends. While Conoil and Eterna’s combined finance costs surged 76.4 per cent to N9.78bn from N5.54bn, TotalEnergies reduced its finance bill by 37.5 per cent to N8.73bn from N13.98bn, offsetting much of the increase recorded by its peers.ConoilConoil’s financial statements showed the company increased borrowings as it sought to finance growing working capital requirements. Its bank overdraft rose by 31.2 per cent to N72.05bn as of June 2026 from N54.90bn at the end of December 2025, while the effective borrowing rate remained at about 32 per cent per annum.The higher debt burden pushed finance costs up 74.1 per cent to N8.29bn in H1 2026 from N4.76bn a year earlier. Although revenue increased 25.2 per cent to N179.90bn and gross profit jumped 64.8 per cent to N18.72bn, finance costs absorbed about 44.3 per cent of gross profit, compared with 41.9 per cent in the corresponding period of 2025.Profit after tax nevertheless rose 473 per cent to N5.15bn, reflecting stronger operating performance despite the heavier financing burden.EternaUnlike Conoil, Eterna embarked on a balance-sheet restructuring during the period. The company raised about N18.97bn through an equity issue, lifting share premium from N5.80bn to N24.33bn and more than quadrupling shareholders’ equity to N31.53bn.The fresh capital enabled Eterna to cut total borrowings by 57.5 per cent to N29.45bn as of June 2026 from N69.31bn at the end of 2025.Despite the sharp reduction in debt, finance costs increased 90.5 per cent to N1.49bn from N782.75m because the company carried higher debt for a significant part of the reporting period before the recapitalisation took full effect.Revenue climbed 37.9 per cent to N217.31bn, while operating profit surged to N8.78bn from N2.34bn. Profit after tax jumped 1,374 per cent to N5.88bn from N399m. The company’s interest coverage also improved significantly, with operating profit covering finance costs about 5.9 times, indicating stronger debt-servicing capacity.TotalEnergiesTotalEnergies adopted a different strategy by reducing debt without raising fresh equity. The company’s bank overdraft declined 12.8 per cent to N73.86bn from N84.67bn, while it added no new borrowings during the period and repaid N10.81bn of existing debt.Related NewsNDLEA, Army seize 604.5kg cannabis, hunt Edo drug kingpinVisa processing shift won’t affect Abuja embassy operations – USMTN Nigeria spent N1.63tn on CAPEX – CFOIts average overdraft interest rate stood at approximately 18 per cent, substantially lower than Conoil’s effective borrowing cost. The lower debt burden reduced finance costs by 37.5 per cent to N8.73bn from N13.98bn.Revenue rose modestly by 4.7 per cent to N443.99bn, but operating profit increased 40.8 per cent to N14.52bn from N10.32bn.The reduction in finance costs helped the company return to profitability, posting a profit after tax of N4.95bn, compared with a N2.86bn loss in the corresponding period of 2025. Interest coverage improved to 1.66 times from 0.74 times a year earlier.Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” ConoilConoil’s financial statements showed the company increased borrowings as it sought to finance growing working capital requirements. Its bank overdraft rose by 31.2 per cent to N72.05bn as of June 2026 from N54.90bn at the end of December 2025, while the effective borrowing rate remained at about 32 per cent per annum.The higher debt burden pushed finance costs up 74.1 per cent to N8.29bn in H1 2026 from N4.76bn a year earlier. Although revenue increased 25.2 per cent to N179.90bn and gross profit jumped 64.8 per cent to N18.72bn, finance costs absorbed about 44.3 per cent of gross profit, compared with 41.9 per cent in the corresponding period of 2025.Profit after tax nevertheless rose 473 per cent to N5.15bn, reflecting stronger operating performance despite the heavier financing burden.EternaUnlike Conoil, Eterna embarked on a balance-sheet restructuring during the period. The company raised about N18.97bn through an equity issue, lifting share premium from N5.80bn to N24.33bn and more than quadrupling shareholders’ equity to N31.53bn.The fresh capital enabled Eterna to cut total borrowings by 57.5 per cent to N29.45bn as of June 2026 from N69.31bn at the end of 2025.Despite the sharp reduction in debt, finance costs increased 90.5 per cent to N1.49bn from N782.75m because the company carried higher debt for a significant part of the reporting period before the recapitalisation took full effect.Revenue climbed 37.9 per cent to N217.31bn, while operating profit surged to N8.78bn from N2.34bn. Profit after tax jumped 1,374 per cent to N5.88bn from N399m. The company’s interest coverage also improved significantly, with operating profit covering finance costs about 5.9 times, indicating stronger debt-servicing capacity.TotalEnergiesTotalEnergies adopted a different strategy by reducing debt without raising fresh equity. The company’s bank overdraft declined 12.8 per cent to N73.86bn from N84.67bn, while it added no new borrowings during the period and repaid N10.81bn of existing debt.Related NewsNDLEA, Army seize 604.5kg cannabis, hunt Edo drug kingpinVisa processing shift won’t affect Abuja embassy operations – USMTN Nigeria spent N1.63tn on CAPEX – CFOIts average overdraft interest rate stood at approximately 18 per cent, substantially lower than Conoil’s effective borrowing cost. The lower debt burden reduced finance costs by 37.5 per cent to N8.73bn from N13.98bn.Revenue rose modestly by 4.7 per cent to N443.99bn, but operating profit increased 40.8 per cent to N14.52bn from N10.32bn.The reduction in finance costs helped the company return to profitability, posting a profit after tax of N4.95bn, compared with a N2.86bn loss in the corresponding period of 2025. Interest coverage improved to 1.66 times from 0.74 times a year earlier.Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” Conoil’s financial statements showed the company increased borrowings as it sought to finance growing working capital requirements. Its bank overdraft rose by 31.2 per cent to N72.05bn as of June 2026 from N54.90bn at the end of December 2025, while the effective borrowing rate remained at about 32 per cent per annum.The higher debt burden pushed finance costs up 74.1 per cent to N8.29bn in H1 2026 from N4.76bn a year earlier. Although revenue increased 25.2 per cent to N179.90bn and gross profit jumped 64.8 per cent to N18.72bn, finance costs absorbed about 44.3 per cent of gross profit, compared with 41.9 per cent in the corresponding period of 2025.Profit after tax nevertheless rose 473 per cent to N5.15bn, reflecting stronger operating performance despite the heavier financing burden.EternaUnlike Conoil, Eterna embarked on a balance-sheet restructuring during the period. The company raised about N18.97bn through an equity issue, lifting share premium from N5.80bn to N24.33bn and more than quadrupling shareholders’ equity to N31.53bn.The fresh capital enabled Eterna to cut total borrowings by 57.5 per cent to N29.45bn as of June 2026 from N69.31bn at the end of 2025.Despite the sharp reduction in debt, finance costs increased 90.5 per cent to N1.49bn from N782.75m because the company carried higher debt for a significant part of the reporting period before the recapitalisation took full effect.Revenue climbed 37.9 per cent to N217.31bn, while operating profit surged to N8.78bn from N2.34bn. Profit after tax jumped 1,374 per cent to N5.88bn from N399m. The company’s interest coverage also improved significantly, with operating profit covering finance costs about 5.9 times, indicating stronger debt-servicing capacity.TotalEnergiesTotalEnergies adopted a different strategy by reducing debt without raising fresh equity. The company’s bank overdraft declined 12.8 per cent to N73.86bn from N84.67bn, while it added no new borrowings during the period and repaid N10.81bn of existing debt.Related NewsNDLEA, Army seize 604.5kg cannabis, hunt Edo drug kingpinVisa processing shift won’t affect Abuja embassy operations – USMTN Nigeria spent N1.63tn on CAPEX – CFOIts average overdraft interest rate stood at approximately 18 per cent, substantially lower than Conoil’s effective borrowing cost. The lower debt burden reduced finance costs by 37.5 per cent to N8.73bn from N13.98bn.Revenue rose modestly by 4.7 per cent to N443.99bn, but operating profit increased 40.8 per cent to N14.52bn from N10.32bn.The reduction in finance costs helped the company return to profitability, posting a profit after tax of N4.95bn, compared with a N2.86bn loss in the corresponding period of 2025. Interest coverage improved to 1.66 times from 0.74 times a year earlier.Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” The higher debt burden pushed finance costs up 74.1 per cent to N8.29bn in H1 2026 from N4.76bn a year earlier. Although revenue increased 25.2 per cent to N179.90bn and gross profit jumped 64.8 per cent to N18.72bn, finance costs absorbed about 44.3 per cent of gross profit, compared with 41.9 per cent in the corresponding period of 2025.Profit after tax nevertheless rose 473 per cent to N5.15bn, reflecting stronger operating performance despite the heavier financing burden.EternaUnlike Conoil, Eterna embarked on a balance-sheet restructuring during the period. The company raised about N18.97bn through an equity issue, lifting share premium from N5.80bn to N24.33bn and more than quadrupling shareholders’ equity to N31.53bn.The fresh capital enabled Eterna to cut total borrowings by 57.5 per cent to N29.45bn as of June 2026 from N69.31bn at the end of 2025.Despite the sharp reduction in debt, finance costs increased 90.5 per cent to N1.49bn from N782.75m because the company carried higher debt for a significant part of the reporting period before the recapitalisation took full effect.Revenue climbed 37.9 per cent to N217.31bn, while operating profit surged to N8.78bn from N2.34bn. Profit after tax jumped 1,374 per cent to N5.88bn from N399m. The company’s interest coverage also improved significantly, with operating profit covering finance costs about 5.9 times, indicating stronger debt-servicing capacity.TotalEnergiesTotalEnergies adopted a different strategy by reducing debt without raising fresh equity. The company’s bank overdraft declined 12.8 per cent to N73.86bn from N84.67bn, while it added no new borrowings during the period and repaid N10.81bn of existing debt.Related NewsNDLEA, Army seize 604.5kg cannabis, hunt Edo drug kingpinVisa processing shift won’t affect Abuja embassy operations – USMTN Nigeria spent N1.63tn on CAPEX – CFOIts average overdraft interest rate stood at approximately 18 per cent, substantially lower than Conoil’s effective borrowing cost. The lower debt burden reduced finance costs by 37.5 per cent to N8.73bn from N13.98bn.Revenue rose modestly by 4.7 per cent to N443.99bn, but operating profit increased 40.8 per cent to N14.52bn from N10.32bn.The reduction in finance costs helped the company return to profitability, posting a profit after tax of N4.95bn, compared with a N2.86bn loss in the corresponding period of 2025. Interest coverage improved to 1.66 times from 0.74 times a year earlier.Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” Profit after tax nevertheless rose 473 per cent to N5.15bn, reflecting stronger operating performance despite the heavier financing burden.EternaUnlike Conoil, Eterna embarked on a balance-sheet restructuring during the period. The company raised about N18.97bn through an equity issue, lifting share premium from N5.80bn to N24.33bn and more than quadrupling shareholders’ equity to N31.53bn.The fresh capital enabled Eterna to cut total borrowings by 57.5 per cent to N29.45bn as of June 2026 from N69.31bn at the end of 2025.Despite the sharp reduction in debt, finance costs increased 90.5 per cent to N1.49bn from N782.75m because the company carried higher debt for a significant part of the reporting period before the recapitalisation took full effect.Revenue climbed 37.9 per cent to N217.31bn, while operating profit surged to N8.78bn from N2.34bn. Profit after tax jumped 1,374 per cent to N5.88bn from N399m. The company’s interest coverage also improved significantly, with operating profit covering finance costs about 5.9 times, indicating stronger debt-servicing capacity.TotalEnergiesTotalEnergies adopted a different strategy by reducing debt without raising fresh equity. The company’s bank overdraft declined 12.8 per cent to N73.86bn from N84.67bn, while it added no new borrowings during the period and repaid N10.81bn of existing debt.Related NewsNDLEA, Army seize 604.5kg cannabis, hunt Edo drug kingpinVisa processing shift won’t affect Abuja embassy operations – USMTN Nigeria spent N1.63tn on CAPEX – CFOIts average overdraft interest rate stood at approximately 18 per cent, substantially lower than Conoil’s effective borrowing cost. The lower debt burden reduced finance costs by 37.5 per cent to N8.73bn from N13.98bn.Revenue rose modestly by 4.7 per cent to N443.99bn, but operating profit increased 40.8 per cent to N14.52bn from N10.32bn.The reduction in finance costs helped the company return to profitability, posting a profit after tax of N4.95bn, compared with a N2.86bn loss in the corresponding period of 2025. Interest coverage improved to 1.66 times from 0.74 times a year earlier.Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” EternaUnlike Conoil, Eterna embarked on a balance-sheet restructuring during the period. The company raised about N18.97bn through an equity issue, lifting share premium from N5.80bn to N24.33bn and more than quadrupling shareholders’ equity to N31.53bn.The fresh capital enabled Eterna to cut total borrowings by 57.5 per cent to N29.45bn as of June 2026 from N69.31bn at the end of 2025.Despite the sharp reduction in debt, finance costs increased 90.5 per cent to N1.49bn from N782.75m because the company carried higher debt for a significant part of the reporting period before the recapitalisation took full effect.Revenue climbed 37.9 per cent to N217.31bn, while operating profit surged to N8.78bn from N2.34bn. Profit after tax jumped 1,374 per cent to N5.88bn from N399m. The company’s interest coverage also improved significantly, with operating profit covering finance costs about 5.9 times, indicating stronger debt-servicing capacity.TotalEnergiesTotalEnergies adopted a different strategy by reducing debt without raising fresh equity. The company’s bank overdraft declined 12.8 per cent to N73.86bn from N84.67bn, while it added no new borrowings during the period and repaid N10.81bn of existing debt.Related NewsNDLEA, Army seize 604.5kg cannabis, hunt Edo drug kingpinVisa processing shift won’t affect Abuja embassy operations – USMTN Nigeria spent N1.63tn on CAPEX – CFOIts average overdraft interest rate stood at approximately 18 per cent, substantially lower than Conoil’s effective borrowing cost. The lower debt burden reduced finance costs by 37.5 per cent to N8.73bn from N13.98bn.Revenue rose modestly by 4.7 per cent to N443.99bn, but operating profit increased 40.8 per cent to N14.52bn from N10.32bn.The reduction in finance costs helped the company return to profitability, posting a profit after tax of N4.95bn, compared with a N2.86bn loss in the corresponding period of 2025. Interest coverage improved to 1.66 times from 0.74 times a year earlier.Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” Unlike Conoil, Eterna embarked on a balance-sheet restructuring during the period. The company raised about N18.97bn through an equity issue, lifting share premium from N5.80bn to N24.33bn and more than quadrupling shareholders’ equity to N31.53bn.The fresh capital enabled Eterna to cut total borrowings by 57.5 per cent to N29.45bn as of June 2026 from N69.31bn at the end of 2025.Despite the sharp reduction in debt, finance costs increased 90.5 per cent to N1.49bn from N782.75m because the company carried higher debt for a significant part of the reporting period before the recapitalisation took full effect.Revenue climbed 37.9 per cent to N217.31bn, while operating profit surged to N8.78bn from N2.34bn. Profit after tax jumped 1,374 per cent to N5.88bn from N399m. The company’s interest coverage also improved significantly, with operating profit covering finance costs about 5.9 times, indicating stronger debt-servicing capacity.TotalEnergiesTotalEnergies adopted a different strategy by reducing debt without raising fresh equity. The company’s bank overdraft declined 12.8 per cent to N73.86bn from N84.67bn, while it added no new borrowings during the period and repaid N10.81bn of existing debt.Related NewsNDLEA, Army seize 604.5kg cannabis, hunt Edo drug kingpinVisa processing shift won’t affect Abuja embassy operations – USMTN Nigeria spent N1.63tn on CAPEX – CFOIts average overdraft interest rate stood at approximately 18 per cent, substantially lower than Conoil’s effective borrowing cost. The lower debt burden reduced finance costs by 37.5 per cent to N8.73bn from N13.98bn.Revenue rose modestly by 4.7 per cent to N443.99bn, but operating profit increased 40.8 per cent to N14.52bn from N10.32bn.The reduction in finance costs helped the company return to profitability, posting a profit after tax of N4.95bn, compared with a N2.86bn loss in the corresponding period of 2025. Interest coverage improved to 1.66 times from 0.74 times a year earlier.Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” The fresh capital enabled Eterna to cut total borrowings by 57.5 per cent to N29.45bn as of June 2026 from N69.31bn at the end of 2025.Despite the sharp reduction in debt, finance costs increased 90.5 per cent to N1.49bn from N782.75m because the company carried higher debt for a significant part of the reporting period before the recapitalisation took full effect.Revenue climbed 37.9 per cent to N217.31bn, while operating profit surged to N8.78bn from N2.34bn. Profit after tax jumped 1,374 per cent to N5.88bn from N399m. The company’s interest coverage also improved significantly, with operating profit covering finance costs about 5.9 times, indicating stronger debt-servicing capacity.TotalEnergiesTotalEnergies adopted a different strategy by reducing debt without raising fresh equity. The company’s bank overdraft declined 12.8 per cent to N73.86bn from N84.67bn, while it added no new borrowings during the period and repaid N10.81bn of existing debt.Related NewsNDLEA, Army seize 604.5kg cannabis, hunt Edo drug kingpinVisa processing shift won’t affect Abuja embassy operations – USMTN Nigeria spent N1.63tn on CAPEX – CFOIts average overdraft interest rate stood at approximately 18 per cent, substantially lower than Conoil’s effective borrowing cost. The lower debt burden reduced finance costs by 37.5 per cent to N8.73bn from N13.98bn.Revenue rose modestly by 4.7 per cent to N443.99bn, but operating profit increased 40.8 per cent to N14.52bn from N10.32bn.The reduction in finance costs helped the company return to profitability, posting a profit after tax of N4.95bn, compared with a N2.86bn loss in the corresponding period of 2025. Interest coverage improved to 1.66 times from 0.74 times a year earlier.Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” Despite the sharp reduction in debt, finance costs increased 90.5 per cent to N1.49bn from N782.75m because the company carried higher debt for a significant part of the reporting period before the recapitalisation took full effect.Revenue climbed 37.9 per cent to N217.31bn, while operating profit surged to N8.78bn from N2.34bn. Profit after tax jumped 1,374 per cent to N5.88bn from N399m. The company’s interest coverage also improved significantly, with operating profit covering finance costs about 5.9 times, indicating stronger debt-servicing capacity.TotalEnergiesTotalEnergies adopted a different strategy by reducing debt without raising fresh equity. The company’s bank overdraft declined 12.8 per cent to N73.86bn from N84.67bn, while it added no new borrowings during the period and repaid N10.81bn of existing debt.Related NewsNDLEA, Army seize 604.5kg cannabis, hunt Edo drug kingpinVisa processing shift won’t affect Abuja embassy operations – USMTN Nigeria spent N1.63tn on CAPEX – CFOIts average overdraft interest rate stood at approximately 18 per cent, substantially lower than Conoil’s effective borrowing cost. The lower debt burden reduced finance costs by 37.5 per cent to N8.73bn from N13.98bn.Revenue rose modestly by 4.7 per cent to N443.99bn, but operating profit increased 40.8 per cent to N14.52bn from N10.32bn.The reduction in finance costs helped the company return to profitability, posting a profit after tax of N4.95bn, compared with a N2.86bn loss in the corresponding period of 2025. Interest coverage improved to 1.66 times from 0.74 times a year earlier.Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” Revenue climbed 37.9 per cent to N217.31bn, while operating profit surged to N8.78bn from N2.34bn. Profit after tax jumped 1,374 per cent to N5.88bn from N399m. The company’s interest coverage also improved significantly, with operating profit covering finance costs about 5.9 times, indicating stronger debt-servicing capacity.TotalEnergiesTotalEnergies adopted a different strategy by reducing debt without raising fresh equity. The company’s bank overdraft declined 12.8 per cent to N73.86bn from N84.67bn, while it added no new borrowings during the period and repaid N10.81bn of existing debt.Related NewsNDLEA, Army seize 604.5kg cannabis, hunt Edo drug kingpinVisa processing shift won’t affect Abuja embassy operations – USMTN Nigeria spent N1.63tn on CAPEX – CFOIts average overdraft interest rate stood at approximately 18 per cent, substantially lower than Conoil’s effective borrowing cost. The lower debt burden reduced finance costs by 37.5 per cent to N8.73bn from N13.98bn.Revenue rose modestly by 4.7 per cent to N443.99bn, but operating profit increased 40.8 per cent to N14.52bn from N10.32bn.The reduction in finance costs helped the company return to profitability, posting a profit after tax of N4.95bn, compared with a N2.86bn loss in the corresponding period of 2025. Interest coverage improved to 1.66 times from 0.74 times a year earlier.Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” TotalEnergiesTotalEnergies adopted a different strategy by reducing debt without raising fresh equity. The company’s bank overdraft declined 12.8 per cent to N73.86bn from N84.67bn, while it added no new borrowings during the period and repaid N10.81bn of existing debt.Related NewsNDLEA, Army seize 604.5kg cannabis, hunt Edo drug kingpinVisa processing shift won’t affect Abuja embassy operations – USMTN Nigeria spent N1.63tn on CAPEX – CFOIts average overdraft interest rate stood at approximately 18 per cent, substantially lower than Conoil’s effective borrowing cost. The lower debt burden reduced finance costs by 37.5 per cent to N8.73bn from N13.98bn.Revenue rose modestly by 4.7 per cent to N443.99bn, but operating profit increased 40.8 per cent to N14.52bn from N10.32bn.The reduction in finance costs helped the company return to profitability, posting a profit after tax of N4.95bn, compared with a N2.86bn loss in the corresponding period of 2025. Interest coverage improved to 1.66 times from 0.74 times a year earlier.Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” TotalEnergies adopted a different strategy by reducing debt without raising fresh equity. The company’s bank overdraft declined 12.8 per cent to N73.86bn from N84.67bn, while it added no new borrowings during the period and repaid N10.81bn of existing debt.Related NewsNDLEA, Army seize 604.5kg cannabis, hunt Edo drug kingpinVisa processing shift won’t affect Abuja embassy operations – USMTN Nigeria spent N1.63tn on CAPEX – CFOIts average overdraft interest rate stood at approximately 18 per cent, substantially lower than Conoil’s effective borrowing cost. The lower debt burden reduced finance costs by 37.5 per cent to N8.73bn from N13.98bn.Revenue rose modestly by 4.7 per cent to N443.99bn, but operating profit increased 40.8 per cent to N14.52bn from N10.32bn.The reduction in finance costs helped the company return to profitability, posting a profit after tax of N4.95bn, compared with a N2.86bn loss in the corresponding period of 2025. Interest coverage improved to 1.66 times from 0.74 times a year earlier.Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” Its average overdraft interest rate stood at approximately 18 per cent, substantially lower than Conoil’s effective borrowing cost. The lower debt burden reduced finance costs by 37.5 per cent to N8.73bn from N13.98bn.Revenue rose modestly by 4.7 per cent to N443.99bn, but operating profit increased 40.8 per cent to N14.52bn from N10.32bn.The reduction in finance costs helped the company return to profitability, posting a profit after tax of N4.95bn, compared with a N2.86bn loss in the corresponding period of 2025. Interest coverage improved to 1.66 times from 0.74 times a year earlier.Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” Revenue rose modestly by 4.7 per cent to N443.99bn, but operating profit increased 40.8 per cent to N14.52bn from N10.32bn.The reduction in finance costs helped the company return to profitability, posting a profit after tax of N4.95bn, compared with a N2.86bn loss in the corresponding period of 2025. Interest coverage improved to 1.66 times from 0.74 times a year earlier.Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” The reduction in finance costs helped the company return to profitability, posting a profit after tax of N4.95bn, compared with a N2.86bn loss in the corresponding period of 2025. Interest coverage improved to 1.66 times from 0.74 times a year earlier.Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” Analysts reactIn an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” In an interview with The PUNCH, Managing Director of Afrinvest, Abiodun Keripe, said the contrasting funding strategies reflected differences in capital structure, liquidity, shareholder support and management priorities rather than different expectations about the downstream market.Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” Keripe said, “The divergence largely reflects each company’s capital structure, liquidity position, shareholder support, and management’s risk appetite following the deregulation of Nigeria’s downstream sector. Companies with stronger access to equity capital have opted to deleverage and preserve financial flexibility in a high-interest-rate environment.“In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” “In contrast, others have relied more heavily on debt to finance increased working capital requirements driven by higher fuel prices and inventory costs.”He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” He maintained that the strategies essentially reflect different balance sheet starting points and funding options rather than differing views on market recovery.On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” On investor sentiment, he added, “Investors are assessing whether earnings growth is supported by sustainable cash flows or driven by increased financial leverage. Companies reducing debt and finance costs are likely to be viewed as improving the quality of earnings and strengthening balance sheet resilience.The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” The Afrinvest chief noted that conversely, businesses increasing borrowings will be judged on whether the additional leverage is generating returns that comfortably exceed the higher cost of capital. “The focus is on capital allocation discipline, financial sustainability, and the ability to navigate a still-elevated interest rate environment,” he remarked.Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” Meanwhile, Vice President of Highcap Securities, David Adonri, said the financing mix had become increasingly important for downstream marketers because their businesses depend heavily on short-term working capital.In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” In a phone interview with The PUNCH, Adonri said, “A lot of these energy companies, especially those that are in marketing, require short-term working capital finance.“A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” “A lot of them borrow from the banks through commercial papers to finance their inventory and sell to their customers. So, for companies such as TotalEnergies Marketing Nigeria Plc, Eterna and Conoil, a high proportion of financing being short-term working capital finance is normal, and that will be reflected in their balance sheets.”Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” Explaining the different strategies adopted by the companies, he added, “TotalEnergies is a case of scaling down. The company has reduced its borrowings and debt service obligations, thereby reducing the risk of business failure. Eterna came to the market to refinance its short-term obligations by raising equity through a rights issue. That reduced its exposure and debt expense, giving room for profits to build up. Conoil appears to rely principally on debt finance for its working capital.”Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” Reflecting on the supply challenges in the downstream sector, Adonri warned that marketers remained exposed to supply disruptions and price volatility.He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.” He said, “If petroleum products are not available, they have nothing to sell. At the same time, interest on borrowings continues to accumulate. That is double jeopardy because there is no income from sales while financing costs continue to rise. That is why marketers need reliable domestic supply arrangements with refineries to ensure product availability and reduce this risk.”