• Thursday, June 20, 2024
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BusinessDay

Presco, Okomu Oil post higher profits amid economic woes

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The combined profit of Presco Plc and Okomu Oil Palm Company Plc rose by 70.2 percent last year, according to data compiled by BusinessDay.

According to the companies’ latest financial statements, its total after-tax profit grew to N51.62 billion from N30.33 billion in 2022.

In terms of sales, the top palm oil producers raked N130.7 billion from N100.8 billion.

Further analysis revealed that Okomu recorded N67.04 billion in revenue from the local market (Nigeria) and N7.95 billion from export sales while Presco recorded revenue from only local sales which was N103.1 billion.

Presco recorded 39 percent growth in sales revenue to N27.6 billion while Okomu oil reported 27 percent in sales revenue to N103.14 billion

“In contrast to domestic listed peer (Okomu), Presco reported earnings growth in the first half of 2023 aided by niche product offerings tailored to meet the specifications of key customers, which mostly shielded the business from the negative impact of smuggling on market share,” analysts at CardinalStone said in a recent note.

Nigeria’s Palm Oil industry, which was a revenue spinner for the country in the 60s before the discovery of crude oil in commercial quantities, is still in its embryonic stage and it is in dire need of funding and transformation policies.

Africa’s most populous nation was in the 1960s, the world’s largest palm oil producer with a global market share of 43 percent.

According to the United States Department of Agriculture, Nigeria is the fifth largest producer of crude palm oil with less than two percent of total global market production of 74.08 million MT. In 1966 Malaysia and Indonesia surpassed Nigeria as the world’s largest palm oil producer.

Analysis of data from individual firms

Presco

Presco’s after-tax profit rose to N30.42 billion in 2023 from N13.03 billion in 2022. Revenue grew to N103.14 billion from N81.03 billion while input cost increased to N39.8 billion from N31.1 billion.

The firm’s finance cost declined to N8.41 billion from N8.49 billion during the period reviewed.

Presco’s selling and distribution expenses declined to N1.55 billion from N1.79 billion and Administrative expenses increased to N20.9 billion from N20.4 billion. Earnings per share rose to N30.42 from N13.03.

The firm is a fully integrated agro-industrial establishment with oil palm plantations, a palm oil mill, a palm kernel crushing plant, and a vegetable oil refining and fractionation plant. It also has an olein and stearin packaging plant and a biogas plant to treat its palm oil mill effluent.

Okomu oil

Okomu Oil’s after-tax profit grew to N21.2 billion in 2023 from N17.3 billion in 2022. Revenue rose to N27.6 billion from N19.8 billion while input cost grew to N27.61 billion from N19.8 billion.

The firm’s finance cost increased to N2.37 billion from N2.26 billion during the period reviewed.

Administrative expenses, selling, and distribution expenses grew to N17.3 billion from N14.4 billion. Earnings per share stood at N0.26 from a loss of N0.79.

Okomu Oil engages in the cultivation of oil palm and processing of fruit bunches into crude palm oil for resale. It operates through the following segments: Palm Plantation, Rubber Plantation, and Palm Processing.