Oil palm giant Presco reports 140% surge in profit

Post-tax profit at oil palm company Presco jumped far more than double to N77.8 billion in 2024, partly due to its recent expansion into the Ghanaian market.

That helped lift margin to 37.5 per cent from 31.6 per cent a year ago for the oil palm giant, acquired by local investor Oak and Saffron last year from Belgium-based Siat SA.

Presco bought a 60 per cent controlling stake in Ghana Oil Palm Development Company Limited last August in its drive to scale and exploit fresh potential in the West African nation, where the demand for palm oil – a vital ingredient in nearly 50 per cent of the packaged products on supermarket shelves – is currently almost three times the supply.

The big picture is to take over the Ghanaian company fully, with payments scheduled in phases, Presco said last June when it announced the first instalment of $65 million.

In January, the agro-processor launched the first tranche of a N150 billion bond programme, seeking to raise N100 billion to part-finance the acquisition.

Revenue for the company jumped 102.6 per cent to N207.5 billion, according to its audited earnings report released on Tuesday, with the Ghanaian subsidiary accounting for N30.5 billion of turnover.

A plan to pay 42.1 per cent more in dividends compared to what it paid shareholders a year ago is underway, Presco announced on Tuesday, with the total payout set to reach N42 billion.

Gains on biological asset revaluation advanced to N29 billion from N12.2 billion in the review period after it reassessed the worth of the palm fruits from its six estates in Edo State, where it is based, and those from its Ghanaian operation.

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FX gain rose by one quarter to N5.5 billion in the period during the year.

Presco incurred N12.7 billion in loss on non-monetary position after accounting for inflation in the calculation of its net monetary assets. That happened as consumer inflation in Nigeria accelerated to its highest level in nearly three decades last year.

Pre-tax profit went up by 128.7 per cent, while profit after tax advanced to N77.8 billion N32.4 billion.