Presco Plc, Nigeria’s second largest palm oil maker by market capitalization has continued the upward trajectory in its financial books following an impressive performance in the first half of the 2021 financial year.
While many companies are still in the gradual recovery mode, Presco achieved a 59 percent increase in its revenue, moving to N21.4 million in 2020 from N13.4 million in the corresponding period of 2020.
Its gross profit in 2020 was N9 million, however, it experienced an upward tick to N16.5 million in the period under review representing an 83 percent increase. Its profit before tax surged by 124 percent to N12.9 million from N5.7 million in 2020.
The oil palm maker achieved a 131 percent increase moving from N4.3 million in 2020 to N10.12 million in 2021, despite a 104 percent increase in its tax payment in 2021 worth N2.8 million, as against the N1.38 million paid in the same period of 2020.
The company mentioned that the COVID-19 pandemic impacted its operations and financial positions, it has put in place contingency measures while it continues to monitor closely new developments.
It also revealed its plans to acquire a company that is in the business of palm cultivation and production in the 2021 financial year.
Presco has so far invested N75 billion into the palm oil industry and has planned a capital expenditure investment of N46 billion between 2018 and 2022 which would go into plantations development, processing facilities, energy infrastructure and other supporting machinery, equipment and infrastructure.
The company had a total land bank of 40,000 hectares, of which total planted areas are 20,136 hectares of oil palm plantation and 138 hectares of rubber plantation.
According to PricewaterhouseCoopers (PwC), in its Palm Oil report, Nigeria is ranked fifth position among the top palm oil-producing countries in the world with less than two percent market share producing 1.03 million metric tonnes, the report also revealed that Nigeria has two major players who are Presco Plc and Okomu Plc.
According to PwC, major challenges affecting the palm oil industry include smuggling, outdated farming techniques, inadequate funding, substandard mills, poor storage facilities resulting in post-harvest losses.
Nigeria is the largest consumer of palm oil in Africa, with demand predominantly propelled by household consumption as 90 percent of palm oil consumption comes from the food industry while the non-food industry accounts for 10 percent.