Nigeria’s biggest agricultural firms realize border closure gains in 2020 as profit surges 62%

Nigeria’s biggest agricultural firms, Okomu oil palm and Presco plc grew profit by the most in three years as sales surged on the back of the border closure in 2020.

The two firms posted a combined profit of N14.4 billion in 2020, up 62 percent compared to N8.8 billion recorded in 2019.

Sales grew 22.8 percent to N47.3 billion in 2020 from N38.5 billion a year before.

“The border closure improved the sales of these agricultural firms as smuggling activities reduced to some extent during the period,” Muda Yusuf, the Director-General, Lagos Chamber of Commerce and Industry (LCCI) said.

Nigeria closed its land borders in August 2019 to boost local production and curb smuggling activities.

The Agricultural sector is not heavily dependent on imported raw materials so that gave Okomu and Presco an edge in 2020 despite the border closure and FX challenges.

Read Also: Nigeria’s agric sector shows strength despite insecurity, pandemic

The gross profit of both firms rose 16 percent to N29.8 billion from N25.7 billion in the periods under review.

Although, cost of sales jumped 36 percent to N17.4 billion compared to N12.8 billion in 2019.

The firms also cut borrowing cost by 31 percent to N1.6 billion in 2020 from N2.32 billion in 2019.

Okomu oil palm

Nigeria’s biggest palm oil producer, Okomu oil palm reported a 46 percent growth in profit to N7.3 billion in 2020 compared to N5.0 billion in 2019 as revenue surged.

Revenue jumped 24 percent to N23.4 billion in 2020 from N18.8 billion the year before.

Sales cost surged 31 percent to N7.6 billion from N5.8 billion in the periods under review.

Gross profit rose 21 percent to N15.7 billion in 2020 from N12.9 billion in 2019.

The oil palm maker cut borrowing cost by 63 percent to N70.8 million from N189.3 million in year 2019.

Earnings per share rose 46.3 percent to N7.74 per share from N5.29 per share during the periods.

Okomu Oil Palm PLC develops oil palm plantation, mills palm oil, and processes palm kernel. The Company also develops rubber tree plantations.

Presco plc

Presco plc also grew profit by 83 percent to N7.0 billion in 2020 from N3.8 percent in 2019.

The company’s revenue soared 21 percent to N23.9 billion from N19.7 billion in the review periods.

Cost of sales rose 39 percent to N9.75 billion from N7 billion in 2019.

Gross profit rose 11 percent to N14.1 billion in 2020 from N12.7 billion in 2019.

Borrowing cost also plunged 28 percent to N1.53 billion compared to N2.13 billion in 2019.

Earnings per share jumped 88 percent to N7.03 per share from N3.74 per share during the periods.

Presco Plc produces specialty fats and oils. The company specializes in the cultivation of oil palm and in the extraction, refining and fractioning of crude oil into finished products.

It possesses oil palm plantations, a palm oil mill, a palm kernel crushing plant and a vegetable oil refining plant in Nigeria.

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