NEWS: Nigeria’s Oil Palm Producers records highest profit in 6yrs in the first half of 2021

palm

Nigeria is ranked fifth position among the top palm oil-producing countries in the world with less than two percent market share producing 1.03 million metric tonnes.

Nigeria’s palm oil producers posted their highest profit in six years in the first half of 2021 as the industry continues to reap the gains of a boom in local demand.

According to theconferencenews.com, Okomu Oil Palm Company and Presco PLC, the largest players in Nigeria’s oil palm space collectively recorded a revenue increase of 67 percent year on year in the first half of 2021, reaching N45.09 billion from N26.98 billion in 2020. The profit after tax of both firms surged by a combined 134 percent to N19.7 billion from N8.4 billion, according to data compiled by BusinessDay.

READ: Africa: Nigeria Spends $500 Million Annually On Palm Oil Importation – CBN
Palm oil producers are still reaping benefits of the policies established by fiscal and monetary authorities, especially the ban placed on accessing forex for palm oil importation into the country and the impact of the border closure exercise which has encouraged patronage of locally made products.

In addition to this, both companies’ revenue increased on the back of increased demand for their products, which has been a trend since the outbreak of the COVID-19 pandemic as consumer’s preference for essential products rather than luxurious products grew.

Investment bank, United Capital, in a recent report, gives an optimistic projection about the future of the Palm oil industry in Nigeria as the key player continues to invest aggressively in capacity expansion.

“However, considering the volatility in government policy due to change of government, there is a medium to long-term downside risk of policy reversal,” United Capital analysts said.

READ: News: Malaysia turns to Africa and the Middle East markets, as Belgium bans use of palm oil as biofuel
Okomu Plc had a revenue surge of 75 percent to N23.6 billion from N13.5 billion in the previous year. Local sale of its products contributed the most to its revenue with N23.62 billion while its other income accounted for a marginal N677 million.

Similarly, its gross profit grew by 74 percent to N21.6 billion in the period under review from N12.4 billion in 2020, Its profit before tax improved by 126 percent moving to N12.4 billion from N5.5 billion in the same period of 2020.

Okomu’s profit jumped 138 percent to N9.5 billion from the N4 billion achieved in the corresponding period of 2020.

Presco as well experienced stellar growth in its financial performance achieving a 131 percent increase in its profit for the period moving from N4.39 billion in 2020 to N10.12 billion in 2021, despite a 104 percent increase in its tax payment in 2021 worth N2.8 billion, as against the N1.3 billion paid in the same period of 2020.

Its revenue and gross profit as well experienced growth. In the first half of 2021, Presco’s revenue grew by 59 percent to N21.4 billion from N13.4 billion in the corresponding period of 2020.

Its gross profit in 2020 was N9 billion, however, it jumped to N16.5 billion in the period under review representing an 83 percent increase. Its profit before tax surged by 124 percent to N12.9 billion in 2021 from N5.7 billion in 2020.

The major challenges affecting the palm oil industry include smuggling, outdated farming techniques, inadequate funding, substandard mills, and poor storage facilities resulting in post-harvest losses.

Nigeria is the largest consumer of palm oil in Africa, with demand predominantly propelled by household consumption as 90 percent of palm oil consumption comes from the food industry while the non-food industry accounts for 10 percent.

Likes:
0 0
Views:
198
Article Tags:
0 Comments

No Comment.