THE combined profits of Okomu Oil Palm Company Plc and co-industry leader, Presco Plc, two quoted agricultural firms, hit a 94.32 per cent rise during the first quarter of 2024 amid worsening volatility of the economy.
The rise in profits was attributed to inflationary pressures and depreciation of the Naira, leading to an astronomical rise in prices of agricultural products in the country.
According to their latest financial statements, tracked by Nairametrics, the duo saw their after-tax profit amounting to N39.135 billion in Q1 2024 from N20.139 billion in the corresponding period of 2023. It came shortly after Presco welcomed a new management as former Olam Vice President, Reji George took over as CEO on June 12, 2024
In terms of revenue, the major palm oil producers raked N80.027 billion from N46.122 billion in 2023.
Further analysis revealed that Okomu recorded N39.299 billion in revenue from the local market (Nigeria) and N4.183 billion from export sales, accounting for a total revenue of N43.482 billion during the period under review while Presco recorded revenue from only local sales which was N43.482 billion.
Presco recorded 94.13% growth in sales revenue, that is N42.545 billion from N21.915 billion in 2023 while Okomu Oil reported 115.91% in sales revenue amounting to N43.482 billion in 2024 from N24.207 billion in Q1 2023. But due to the depreciation of the Naira and other noticeable macro-economic fallouts, notably the inflationary pressures, especially in the domestic market. Consequently, inflation became heightened in the food sector, causing spiraling prices of food items.
Also in Q1, Nigeria’s food inflation rate reached 40.66% on a year-on-year basis, a significant increase from the 24.82% recorded in May 2023. It is also higher than the 40.53% recorded in April 2024. This sharp rise in food prices has been attributed to a range of factors affecting various food categories.
Investigations revealed that items contributing to food inflation were mostly Semovita, oatflake, yam flour pre-packaged, garri, beans (which are under bread and cereals class), Irish potatoes, yam, water-yam (under potatoes, yam and other tubers category), palm oil, vegetable oil (under oil and fat), stockfish, mudfish, crayfish (under the fishes category), beef head, live chicken, pork head, bush meat (under the meat class).
However, on a month-on-month basis, food inflation in May 2024 was recorded at 2.28%, a decrease from the 2.50% recorded in April 2024.
As for the breakdown of the performances, a cursory look at the financials showed that Presco Plc’s profit after tax rose by 141.47% to N24.055 billion from N9.962 billion in 2023.
Revenue sales grew by 94.13% from N21.915 billion to N42.545 billion in 2024. Cost of sales was N8.747 billion as against N5.697 billion reported in 2023, representing a growth of 53.54%.
The cost of sales gulped 20.56% of the total revenue of the company.
Presco closed trading on Wednesday, June 19, 2024 at N359.00 per share recording a 4.1% gain over its previous closing price of N345.00.
Okomu Oil Plc grew profit after tax by 48.18% to N15.080 billion in Q1’ 2024 from N10.177 billion recorded in 2023.
