With N18.05bn Profit, Okomu Surpasses 2021 Performance

Kayode Tokede

Okomu Oil Palm Plc maintained an impressive profit after tax growth for the third year running with a profit of N18.05 billion at the end of the nine months ended September 30, 2022, which is ahead of N11.54billion reported in full year ended December 31, 2021.

The financial report of the oil palm and rubber producing company for the nine months 2022 shows that it is maintaining an upswing in the bottom line for the third straight year.

The company has elevated profit before tax from N7.5 billion in 2019 to N8.69 billion in 2020, accelerating to N16.1 billion in 2021 and climbing further to over N24.62 billion in the nine months 2022 unaudited result and accounts.

The company’s challenge in the nine months 2022 came from the cost of sales that rose significantly by 356.5 per cent to N14.41billion from N3.2billion reported in nine months 2021.

The high jump in the cost of sales compares to an increase of 61.6 per cent in revenue to N50.18 billion in nine months 2022 from N31.05billion in nine months 2021.

The revenue breakdown shows a 72.3 per cent increase in local sales to N46.29billion in nine months 2022 from N26.86billion in nine months 2021, while sales from exports dropped by 7.1 per cent to N3.89billion in nine months 2022 from N4.18billion reported in nine months 2021.

The company’s management responded with cost saving steps that cut net operating expenses by 18 per cent to N10.67 billion in nine months of 2022 from N13.01billion reported in nine months of 2021. 

Despite that, operating profit still went up by close to 66.1 per cent to N24.6 billion in nine months of 2022 from N14.8billion in nine months of 2021.

The company reported N536.79million finance cost in nine months of 2022 from N111.14million in nine months of 2021, driven by interest on long term loans.

Okomu Oil Palm 2021 FY performance

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

The Nigeria’s biggest crude palm oil producer and second-biggest producer of rubber has recorded its highest profits in 10 years.

The palm oil company grew its full-year profit 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 per cent 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 per cent local sales while only 14.9 per cent was from exports. Local sales reported N31.9 billion while export sales yielded N5.6 billion.

Further analysis by 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.

Okomu oil also recorded a 5234.5 per cent 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 per cent 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 2021 from N34.8 billion, in 2020. Okomu oil has a market cap of N159.78 billion with a stock price of N167.5 per share as of December 2, 2022. 

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.