Okomu Oil Palm Plc reports a pre-tax profit of N52.05 billion for the 2024 financial year, reflecting a 58% increase from N32.85 billion in 2023. The company attributes this strong performance to a sharp rise in revenue, which grows by 73.44% to N130.06 billion, compared to N75.10 billion in the previous year.
The revenue boost is primarily driven by increased local sales of crude palm oil and rubber, which contribute over 82% of total earnings. Local sales jump to N107.54 billion from N67.04 billion in 2023, showcasing a strong market demand.
Key Financial Highlights (FY 2024 vs FY 2023)
- Revenue: N130.06 billion, up 73.44% YoY
- Cost of Sales: N48.48 billion, up 75.6% YoY
- Gross Profit: N81.57 billion, up 72% YoY
- Operating Expenses: N30.78 billion, up 78% YoY
- Operating Profit: N50.79 billion, up 69% YoY
- Net Finance Income: N1.26 billion
- Pre-tax Profit: N52.05 billion, up 58% YoY
- Taxation: N17.77 billion, up 52% YoY
- Profit After Tax: N34.28 billion, up 61.9% YoY
- Earnings Per Share: N35.93, up 61.9% YoY
Market Performance and Cost Management
Strong demand for crude palm oil, coupled with an abundant supply from mature palm trees and smallholder farmers, boosts full-year revenue to N130.06 billion. Domestic sales account for 82.6% of total earnings, while export sales rise significantly to N22.5 billion from N7.5 billion in the previous year.
Despite this success, Okomu Oil faces higher operational costs, with total expenses surging 76.5% year-on-year to N79.21 billion. This includes a cost of sales of N48.48 billion and operating expenses of N30.78 billion. Nevertheless, the company maintains a strong gross profit margin of 62.7% (compared to 63.2% in 2023), demonstrating effective cost management and pricing strategies.
Okomu Oil continues to generate profits despite rising expenses, indicating a solid financial strategy. The company records a net finance income of N1.26 billion, benefiting from foreign exchange gains on export proceeds, helping to offset currency-related losses.
Strengthening Liquidity and Shareholder Value
The company’s return on assets (ROA) improves to 28% from 22%, signaling increased efficiency in asset utilization. Return on equity (ROE) also rises sharply to 257% from 193% in 2023, reflecting greater shareholder value through higher profitability.
While the company achieves strong sales, its inventory turnover declines to 0.09x in 2024 from 0.12x in 2023, suggesting a slower pace in converting stock to sales. The equity ratio increases slightly from 41% to 42%, indicating a higher portion of assets funded by shareholders.
Additionally, Okomu Oil strengthens its financial flexibility, growing working capital from N4.55 billion to N8.28 billion in 2024. This ensures the company can meet short-term obligations and sustain operations effectively.
Okomu Oil’s profitability highlights robust sales growth, effective cost control, enhanced asset efficiency, and a strong cash position. These factors drive improved shareholder returns and position the company for continued success in the years ahead.
