Okomu Oil Palm Plc Financial Overview -

Last Updated on 27 December 2024 by Naijadazz

Okomu Oil Palm Plc, a prominent entity in Nigeria’s agricultural sector, has recently disclosed its financial performance for Q2 2024, revealing a mix of challenges and growth. The company reported a pre-tax profit of N6.24 billion for the quarter ending June 30, 2024, which is a 22.28% decline year-on-year and below the forecasted N6.699 billion.

Quarterly and Half-Year Performance

Q2 2024 Financial Highlights:

Revenue: N31.525 billion, a 25.7% decrease from Q1 2024.
Cost of Sales: N20.152 billion, up 200.51% YoY.
Gross Profit: N11.373 billion, up 17.43% YoY.
Net Operating Expenses: N5.708 billion, up 12.01% YoY.
Profit from Continuing Operations Before Tax Changes in Fair Value: N5.665 billion, up 23.45% YoY.
Exchange Gain: N3.502 billion.
Exchange Loss: N2.702 billion.
Profit After Tax: N5.115 billion, down 15.06% YoY.
Earnings Per Share: N5.36, down 15.06% YoY.

Despite the quarterly decline, the first half of 2024 shows a positive trend:

H1 2024 Revenue: N75.008 billion, nearly matching the total revenue for 2023.

Market Position

Local sales continue to be a significant revenue driver, contributing approximately 90% of total sales. This strong local market presence underscores Okomu’s crucial role in Nigeria’s agricultural economy.

Financial Analysis

Okomu’s performance in Q2 2024 lagged behind Q1 2024 across key metrics such as revenue, profits, margins, and earnings per share. This indicates a weaker financial performance in the second quarter, characterized by lower sales and reduced profitability. However, the company maintained a robust gross profit margin of 36% and a net profit margin of 16.2%, suggesting effective cost management and strong market demand.

Foreign Exchange Impact

The company experienced significant fluctuations in foreign exchange rates, recording an exchange gain of N3.502 billion and an exchange loss of N2.702 billion. These forex movements can have a substantial impact on financial statements, affecting reported profits and investor sentiment. Management must address these fluctuations during earnings calls to provide insights into the company’s outlook.

Dividend Policy and Share Performance

Okomu Oil Palm Plc has a consistent track record of dividend payments, enhancing shareholder value. Over the past five years, the company has regularly distributed dividends. In 2023, it paid an interim dividend of N4.50 per share from a profit after tax of N16.199 billion. For H1 2024, the company reported a post-tax profit of N20.196 billion, indicating strong potential for an interim dividend.The share price has shown resilience, rebounding from a Q1 2024 year-to-date decline of 24.85% to achieve a year-to-date gain of 12.31% as of July 26, 2024. This recovery reflects growing investor confidence in Okomu’s business model and future prospects.

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