News in brief:
– Okomu Oil and Presco Plc recorded their highest after-tax profits in a decade, driven by increased palm oil demand.
– Edo State leads Nigeria’s palm oil production, attracting major investments and boosting the sector’s expansion.
Okomu Oil and Presco Plc, two of Nigeria’s leading oil palm producers listed on the Nigerian Exchange Group, have recorded their highest after-tax profits in a decade despite inflationary pressures and the depreciation of the naira.
Presco Plc reported a staggering 4,088.7% profit growth, while Okomu Oil achieved an 1,188.3% increase from 2015 figures. In 2024 alone, Okomu Oil’s after-tax profit surged to ₦34.3 billion, up from ₦21.2 billion in 2023. Meanwhile, Presco Plc’s after-tax profit rose to ₦104.3 billion in the first nine months of 2024, compared to ₦32.9 billion in the same period of 2023.
Edo State: Nigeria’s oil palm hub
Edo State remains the epicenter of palm oil production in Nigeria, with Okomu Oil and Presco leading the charge. According to Femi Oke, Chairman of the All Farmers Association of Nigeria (Lagos/Southwest Zone), the state’s favourable climate and soil conditions contribute to its high yields.
Governor Godwin Obaseki emphasised that Edo contributes 12% of Nigeria’s total palm oil production, surpassing Akwa Ibom and Cross River States, which contribute between 5% and 8%. Through the Edo State Oil Palm Programme (ESOPP), the government has allocated over 70,000 hectares for oil palm development, attracting investments exceeding $500 million.
Stock market and financial performance
Both companies have outperformed many consumer goods firms struggling with inflation. As of February 28, 2025, Okomu Oil’s share price traded at ₦545, with 142,467 volumes traded and 953.9 million shares outstanding. Presco Plc’s stock traded at ₦785, with 140,996 volumes traded and 1 billion shares outstanding.
Presco Plc is set to raise ₦100 billion in Series 1 of its ₦150 billion bond program, the largest corporate bond issuance in Nigeria’s palm oil sector. The 7-year bond will offer a yield range of 23.25% to 23.75%, reinforcing the company’s robust credit profile, which holds an Aa rating from Agusto & Co. and an A- rating from GCR.
This marks Presco’s second foray into capital markets after successfully raising ₦34.5 billion in 2022 under a similar bond program.
Nigeria’s palm oil sector: a mixed outlook
Despite the profitability of top producers, Nigeria’s palm oil industry still faces challenges. The country remains the largest consumer of palm oil in Africa but struggles with a 1.6 million metric ton production deficit. Industry leaders cite insecurity, poor infrastructure, and high fertiliser costs as major hurdles.
Alphonsus Inyang, President of the National Palm Produce Association of Nigeria (NPPAN), emphasised that Nigeria could save $600 million annually by reducing palm oil imports and investing in local production.
Both Okomu Oil and Presco Plc continue to expand their integrated operations, including palm oil plantations, refining plants, and kernel-crushing facilities. While Nigeria’s palm oil sector is witnessing a resurgence, experts stress the need for strategic investments and government policies to bridge the production gap and enhance the industry’s global competitiveness.
