Okomu Oil Palm Company Plc – Q2/H1 2025 Results

Okomu Oil Palm Company Plc delivered another robust performance in 9M 2025, reflecting continued price strength in the palm oil market, increased output, and operational efficiency gains.

The Group recorded a profit before tax (PBT) of ₦84.1 billion, up 106.7% year-on-year (YoY) from ₦40.7 billion in 9M 2024. Profit after tax (PAT) surged 113% YoY to ₦60.3 billion (9M 2024: ₦28.3 billion), supported by strong revenue growth and improved cost management. Earnings per share rose sharply to ₦63.25 from ₦29.71 in the prior year — a clear signal of value accretion and profitability momentum.

Key Financial Highlights

Metric | 9M 2025 (₦’000) | 9M 2024 (₦’000) | YoY % Change

Turnover | 173,951,030 | 103,948,989 | +67.3%

Cost of Sales | 61,874,427 | 44,635,124 | +38.7%

Gross Profit | 112,076,603 | 59,313,865 | +88.9%

Operating Expenses | 25,974,909 | 18,122,450 | +43.3%

Operating Profit (Pre-tax) | 86,101,694 | 41,191,415 | +109.1%

Finance Income | 317,042 | 8,237,901 | –96.1%

Finance Costs | (2,319,680) | (8,747,720) | –73.5%

Profit Before Tax (PBT) | 84,099,056 | 40,681,596 | +106.7%

Tax Expense | 23,766,325 | 12,343,066 | +92.5%

Profit After Tax (PAT) | 60,332,731 | 28,338,530 |+113.0%

Earnings Per Share (₦) | 63.25 | 29.71 | +113%

Performance Analysis

Revenue Growth

• Revenue grew 67.3% YoY, driven by higher crude palm oil (CPO) output, firm local pricing, and improved sales of rubber products.
• The growth underscores strong demand in Nigeria’s edible oil market, coupled with the company’s capacity utilization and yield improvements.

Cost Efficiency and Margin Expansion

• Cost of sales increased at a slower pace (+38.7%) than turnover, supporting gross margin expansion to 64.4% (9M 2024: 57.1%).
• Operating expenses rose 43.3% YoY, reflecting inflationary cost pressures, logistics expenses, and wage adjustments, but remained well-contained relative to topline growth.

Profitability

• Okomu’s PBT margin improved significantly to 48.3% (9M 2024: 39.1%).
• PAT margin strengthened to 34.7%, demonstrating the firm’s resilient cost control and improved yield efficiency.

Finance Items

• Finance income declined sharply (–96%), reflecting lower interest income on cash holdings or reduced short-term investments.
• Finance costs dropped 73.5%, likely due to deleveraging and reduced loan exposure (long-term loans fell to ₦5.6bn from ₦7.1bn).

Balance Sheet Overview

Key Item | Sep 2025 (₦’000) | Dec 2024 (₦’000) | Change

Total Fixed Assets | 86,473,957 | 76,991,900 | +12.3%

Current Assets | 48,929,790 | 40,046,038 | +22.2%

Current Liabilities | 39,066,945 | 26,111,091 | +49.6%

Net Current Assets | 9,862,845 |13,934,947 | –29.2%

Total Net Assets | 62,392,066 | 55,478,295 | +12.5%

Key Observations:

• Total Assets increased modestly due to growth in cash and inventory balances, showing improved liquidity.
• Cash and Bank Balances rose to ₦25.4 billion (Dec 2024: ₦17.3 billion), suggesting strong operating cash flows.
• Long-term loans declined by ₦1.55 billion, confirming a more conservative capital structure.
• Equity reserves rose by ₦6.9 billion, reflecting retained earnings accumulation from profit growth.

Liquidity and Solvency

• Okomu Oil maintains a strong liquidity position, with cash representing over 40% of current assets.
• Debt-to-equity ratio declined further, improving balance sheet resilience.
• No new long-term financing was recorded, indicating that ongoing expansion and working capital needs are being funded largely from internal cash flows.

Operational and Strategic Outlook

The company’s performance affirms its status as Nigeria’s leading integrated palm oil producer, benefiting from:

• Favourable global CPO prices amid tight supply;
• Growing domestic demand driven by food processors and industrial consumers;
• Efficient plantation management and yield optimization;
• Commitment to sustainability and backward integration.

Going forward, Okomu is expected to sustain earnings momentum through:

• Reinvestment into plantation expansion and mill capacity.
• Further cost optimization and energy efficiency.
• Leveraging strong cash flows for shareholder value creation (potential dividend outlook remains positive).

Analyst Comment – Earnings Momentum Sustained, Margin Expansion Evident

“Okomu Oil delivered one of its strongest interim results in recent years, doubling profits on the back of robust topline growth and disciplined cost control. The company’s low leverage, high cash position, and operational efficiency provide a solid buffer against macro pressures. While rising input costs and potential FX volatility pose mild risks, the medium-term fundamentals remain firmly positive.”

Conclusion

Okomu Oil Palm’s 9M 2025 performance highlights strong earnings quality, expanding margins, and a resilient balance sheet. The company remains well-positioned to deliver sustainable growth and consistent shareholder returns in FY2025.