Nigerian tycoon Aderemi Makanjuola's Caverton narrows loss to $10 million as revenue slides 40%

Caverton Offshore Support Group cut its pre-tax loss by three quarters last year, though the improvement owes more to one-off gains and a currency swing than to any recovery in the business Aderemi Makanjuola built.

The Lagos-listed offshore logistics company reported a pre-tax loss of $9.98 million (N13.87 billion) for the year ended December 31, down 74% from $38.61 million (N53.67 billion) in 2024. Revenue fell 40% to $17.34 million (N24.10 billion) from $28.91 million (N40.18 billion).

Almost every line of the business shrank. Flight-contract revenue, the largest single earner, collapsed 61% to $5.57 million (N7.74 billion). Helicopter charter slipped 7% to $5.47 million (N7.60 billion). Training services fell 35%, helicopter maintenance dropped 19%, and agency services fell 41% to $73,000 (N101.79 million). Aviation now accounts for nearly 94% of group revenue, leaving marine work a sliver.

Costs came down harder than sales. Cost of sales fell 62% to $8.60 million (N11.96 billion), with consumables dropping to $1.06 million (N1.48 billion) from $7.94 million (N11.03 billion) and crew expenses nearly halving. Gross margin widened to 50.4% from 21%, and gross profit rose 44% to $8.74 million (N12.15 billion).

That gain was swamped by administrative expenses, which nearly tripled to $20.86 million (N28.99 billion). The largest item was a $12.53 million (N17.42 billion) write-off of security deposits on leased aircraft, money the group could not recover after the lease agreements were terminated.

What turned the operating line positive was not the business. Caverton posted an operating profit of $2.59 million (N3.60 billion), against an operating loss of $22.27 million (N30.96 billion) a year earlier, on the back of $9.35 million (N13.00 billion) in other gains. Those comprised $5.53 million (N7.68 billion) in exchange gains, $2.41 million (N3.35 billion) from lease termination, $2.36 million (N3.28 billion) from settling liabilities and $928,000 (N1.29 billion) in exchange gains on borrowings. Other income rose to $4.55 million (N6.33 billion), driven mainly by a $3.91 million (N5.44 billion) profit on the disposal of an asset held for sale.

Strip out the currency moves, the lease unwinds and the asset sale, and the operating profit disappears.

Debt then took the rest. Finance costs of $13.41 million (N18.64 billion) dwarfed operating profit, and the headline 19% decline in that figure flatters the picture, since it reflects the absence of an $8.77 million (N12.19 billion) exchange loss booked in 2024. The underlying number moved the wrong way. Interest on debts and borrowings more than tripled to $11.38 million (N15.82 billion) from $3.76 million (N5.22 billion).

Borrowings climbed 31% to $51.34 million (N71.36 billion). Current borrowings almost doubled to $38.45 million (N53.45 billion).

The balance sheet grew, but through revaluation rather than trading. Total assets rose 56% to $85.35 million (N118.63 billion), driven by property, plant and equipment jumping to $53.08 million (N73.78 billion) from $13.68 million (N19.02 billion). The $42.96 million (N59.72 billion) revaluation gain landed in equity, not in profit. Shareholders' equity remains negative at minus $6.30 million (N8.76 billion), an improvement on minus $39.29 million (N54.61 billion) but still a deficit.

Liquidity is the sharper problem. Current assets of $25.84 million (N35.92 billion) sit against current liabilities of $76.44 million (N106.25 billion), leaving net current liabilities of $50.60 million (N70.33 billion). Cash rose sevenfold to $2.42 million (N3.37 billion) from $322,000 (N447.86 million), a low base that says more about how thin the buffer had become than about the strength of the recovery.

Caverton has been squeezed by a slowdown in offshore activity across Nigeria's oil sector, where contract timing and fleet utilisation swing results and where international operators have divested onshore assets. The group flies personnel to offshore platforms, supplies rigs, and runs training facilities that include the first full-flight helicopter simulator in sub-Saharan Africa.

Makanjuola built it late in his career. A former banker and economist, he left the industry in 1999 at 51 to start Caverton Marine, added Caverton Helicopters in 2002, and consolidated the ventures into Caverton Offshore Support Group in 2008. The company listed on the Nigerian Exchange in May 2014. He serves as chairman, and his son Olabode Makanjuola is executive vice chairman and chief executive.

Investors have taken the results without alarm. The stock trades at N5.55, up 2.8% this year from an opening price of N5.40 and 13% higher over the past month, giving the company a market value of $13.38 million (N18.60 billion).

Losses that narrow on lease terminations and currency gains are not the same as a business that has turned. Caverton's next set of numbers will show which one it is.