• Tuesday, July 16, 2024
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Okomu oil Plc records highest profit in ten years

Okomu oil Plc records highest profit in ten years

Okomu oil, Nigeria’s biggest crude palm oil producer and second-biggest producer of rubber has recorded its highest profits in ten years, an analysis by BusinessDay has revealed.

The palm oil company grew its full-year profit ending December of 2021 to N14 billion from N7.8 billion in the comparable period of 2020.

The noteworthy performance by Okomu plc in the period under review of 2021 was due to an efflux in local sales backed by the ban on accessing forex for palm oil importation into the country thereby encouraging patronage of locally made products.

Okomu plc grew its revenue by 60 percent to N37.5 billion in the financial year ended December 2021 from N23.4 billion in the comparable period of 2020.

The revenue was on the back of 85 percent local sales while only 14.9 percent was from exports. Local sales reported N31.9 billion while export sales yielded N5.6 billion.

Further analysis by BusinessDay shows the company made a profit margin of 37.5 percent, showing how efficient the company is at managing its cost relative to its revenue.

Read also: Experts urge Nigeria to tap huge benefits in her relation with Malaysia on palm oil

Okomu oil also recorded a 5234.5 percent spurt in its finance income which gave a boost to its income and consequently, the performance in the period.

Finance income increased to N380 million in 2021 from N7 million in the previous year. This consists of N331 million from exchange gain and other income of N48.9 million.

However, finance cost also increased by 174 percent to N192.8 million from N70 million in the comparable period of 2020 consisting of N113.4 million from exchange cost and N78.9 million from interest on long term loans.

The increase in profit was despite the 51.4 percent increase in the cost of sales to N11.7 billion in the year ended 2021 compared to N7.7 billion incurred in the comparable period of 2020.

The cost of sales in the year ended 2021 consists of N9.8 billion from sales of oil palm and N1.9 billion from the sales of rubber.

There was an increase in the palm oil company’s earnings per share ratio to N14.72 from N8.2.

Okomu oil’s total assets grew to N65.7 billion as of December 2021 from N34.8 billion, in December 2020.

Okomu oil has a market cap of N135.5 billion with a stock price of N142 as of Friday, 28 January 2021 year to date.

According to the company’s financial report, the principal activities of Okomu oil are the development of oil palm plantation, palm oil milling, palm kernel processing, and the development of rubber plantation. Their products are palm oil, palm kernel oil, palm kernel cake, Banga(package), and rubber cup lumps.