Okomu Oil Palm Plc, a major oil palm production company in Nigeria, has recorded a 22 percent rise in its after-tax profit for 2023, according to its latest unaudited financial statement.
The company’s after-tax profit rose to N21.16 billion last year, the highest in at least 13 years, from N17.33 billion in 2022.
It also recorded a turnover of N75 billion, a 26.6 percent growth from N59.2 billion.
Read also: Okomu oil Plc records highest profit in ten years
“The higher sales print was driven by the effect of the local currency devaluation on crude palm oil (CPO) prices, which triggered an increase in local CPO prices,” analysts at Cordros Research said in a note on Tuesday.
Further analysis of the statement shows that the company reported N7.95 billion in export sales, marking a 44.7 percent growth from the previous year. Operating expenses also increased by 19.7 percent to N17.29 billion.
Read also: Asue Ighodalo resigns as Okomu Oil’s director
The Edo-based manufacturer recorded an exchange gain of N762.8 million from N74.6 million.
Earnings per share for the period was N22.19, up from N18.17.
Net cash inflow from operating activities declined to N23.22 billion from N25.68 billion.
Net cash outflow from investing activities was a negative of N7.39 billion compared to a negative of N11.44 billion.
Net cash inflow/(outflow) from financing activities recorded a negative of N17.15 billion, an improvement from the negative of N18.36 billion.
The cash and cash equivalent for the period amounted to N4.50 billion, down from N5.84 billion.
Cordros Research projected that Okomu Oil’s toplines will be driven by favourable factors such as upside for Nigerian CPO planters, especially amidst foreign exchange liquidity.
“We anticipate further improvement in the company’s earnings in 2024, driven by top-line expansion supported by favourable factors such as the upside for Nigerian CPO planters, especially amidst foreign exchange liquidity challenges, which we believe will positively impact the company’s earnings,” they said.
They added that higher volumes, facilitated by the upgrade of the milling capacity at Okomu II, are also expected to contribute to this growth.
The company was founded by the Federal Government in the Okomu Forest Reserve in 1976. It became publicly listed in 1990 on the Nigerian Stock Exchange in 1990.
It is a member of the Socfinal group of Luxembourg which owns 62.94 percent of the company’s shares with Nigerians owning the balance of 37.06 percent.
The principal activities of the company are the development of oil palm plantation, palm, oil milling, palm kernel processing and the development of rubber plantation.
The products are palm oil, palm kernel oil, palm kernel cake, banga (package) and rubber cup lumps.
It owns a planted area of 19,061 hectares of oil palm and 7,335 hectares of rubber plantation.
As of December 2022, the company produced about 54,091 tonnes of palm oil, 10,353 tonnes of palm kernel, and 8,124 tonnes of dry rubber.
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