Cameroon’s National Hydrocarbons Corporation (SNH) reported a 41.3% drop in net profit in 2025, despite posting slightly higher revenue, as weaker operating performance continued to weigh on its results.

The company’s standalone financial statements show that SNH remained loss-making in its core operations, with overall profitability once again supported mainly by income from investments and equity holdings.

Revenue rose 6.1% to CFA5.55 billion in 2025 from CFA5.23 billion a year earlier, driven almost entirely by higher sales of manufactured products.

The increase, however, was not enough to offset rising operating costs. Value added fell 35.6% to CFA9.05 billion, while earnings before interest, taxes, depreciation, and amortization (EBITDA) swung to a loss of CFA3.36 billion from a positive CFA1.72 billion in 2024. After depreciation and provisions, the operating loss widened to CFA12.47 billion, compared with CFA6.53 billion the previous year.

Operating costs climbed sharply

The weaker operating performance was largely driven by higher external service costs, which increased 23% to CFA6.43 billion. Fees paid to intermediaries and consultants alone rose to CFA4.03 billion from CFA3.26 billion.

Taxes and duties nearly quadrupled to CFA1.64 billion, mainly because tax penalties and fines jumped to CFA1.32 billion from just CFA13.2 million a year earlier.

Other operating expenses also rose sharply, increasing 80% to CFA5.28 billion. These included CFA2.35 billion in miscellaneous expenses and CFA2 billion in provisions for short-term risks.

Personnel costs were broadly unchanged, edging up less than 1% to CFA12.41 billion. The figures highlight a growing mismatch between revenue and costs. SNH generated CFA5.55 billion in commercial revenue while spending more than CFA12.4 billion on personnel alone, in addition to external services, taxes, purchases, and other operating expenses.

Financial income remained the main profit driver

Against that backdrop, financial income once again kept the company profitable. Financial profit reached CFA43.88 billion in 2025, comfortably exceeding the CFA12.47 billion operating loss.

That contribution nevertheless declined 24.1% from CFA57.82 billion in 2024, mainly because income from equity holdings fell 20.8% to CFA41.64 billion. Investment income also dropped 57.2% to CFA2.24 billion.

After offsetting operating losses with financial income, profit from ordinary activities stood at CFA31.4 billion. Following a CFA11.43 billion income tax charge, net profit came in at CFA19.98 billion. Without financial income, SNH would have reported a net loss in 2025.

The results confirm that the company’s profitability depends far more on returns from investments and equity holdings than on its commercial operations.

This also explains SNH’s unusually high net margin. Net profit represented about 360% of revenue in 2025, compared with more than 650% the previous year. Rather than reflecting exceptional commercial profitability, the ratio highlights the outsized contribution of financial income, which was nearly eight times larger than annual revenue.

Operating cash flow weakened

The cash flow statement also points to weaker performance in SNH’s core business. Overall cash generation declined 31.2% to CFA29.09 billion. Net cash from operating activities fell even more sharply, dropping 53.9% to CFA13.12 billion, mainly because of a CFA12.62 billion increase in receivables and a CFA3.8 billion adverse change in working capital liabilities.

Investing activities generated a positive cash flow of CFA6.96 billion, down from CFA20.12 billion in 2024, largely thanks to CFA11.54 billion in proceeds from the sale of financial assets.

During the year, SNH also paid CFA24 billion in dividends and recorded CFA3.41 billion in capital withdrawals. Overall, net cash declined by CFA7.32 billion, reversing the CFA17.96 billion increase recorded in 2024. Despite the decline, cash holdings remained strong at CFA159.21 billion at the end of 2025.

Strong balance sheet, but audit concerns remain

SNH’s balance sheet remained solid. Total assets slipped 1.2% to CFA328.85 billion, while shareholders’ equity stood at CFA270.28 billion, representing more than 82% of total assets. The company also reported no outstanding bank or bond debt at the end of 2025.

At the same time, provisions for risks and liabilities rose 23% to CFA43.66 billion. Litigation provisions accounted for CFA37.53 billion, while pension-related provisions totaled CFA5.43 billion.

The company’s external auditors issued a qualified opinion. Among other observations, they noted that SNH had not recorded its CFA5.58 billion investment in the CSTAR Tank Farm project as a financial asset. They also concluded that the provision for end-of-career benefits should be increased by CFA4.77 billion.

The 2025 accounts show that SNH continues to benefit from a strong balance sheet and substantial cash reserves. However, they also underline that the company’s profitability remains heavily dependent on financial income rather than its core business.

Source: Business in Cameroon