The Okomu Oil Palm Company Plc in its Management reports (Interim) for 6 months ended Jun 30, 2021 posted an astonishing 91.78% Gross Profit Margin, as it made a Gross Profit of N21.68bn from a revenue of N23.62bn.
Although the 91.78% Gross Profit Margin is very impressive, it is slightly lower than the 91.99% Gross Profit Margin the company reported for the same period in 2020.
Earlier in the week, Investogist reported that Presco Plc, a company in the same sector as Okomu Oil Palm Company had reported a Gross Profit Margin of 77.01% in the same H1 2021 period.
These Gross Profit Margins, which are well above the Nigerian Exchange’s average for listed companies, show the viability of the business model adopted by these two agro-allied industrial giants.
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The Okomu Oil Palm Company Plc is listed on the Nigerian Exchange with the ticker symbol of OKOMUOIL.
Analysis of Statement of Profit or Loss and Comprehensive Income
Okomu posted a Turnover of N23.62 for the 6 months period ended 30 June, 2021. This represents a 74.67% (N10.10bn) increase on the N13.52bn reported in the 6 months period ended 30 June, 2020.
Of the N23.62bn revenue earned, N21.34bn was realized from local sales (N12.42bn in H1 2020) and N2.28bn from export sales (N1.10bn in H1 2020).
The Cost of Sales increased at a similar rate as the Turnover, increasing by 79.32% from N1.08bn to N1.94bn. A Gross Profit of N21.68bn was posted for the period, up by 74.26% from N12.44bn.
The company’s net operating expenses increased by 38.05%, from N6.63bn to N9.15bn in the period in review.
A taxation of N2.91bn (H1 2020: N1.49bn) was paid on a Profit before tax of N12.44bn (H1 2020: N5.50bn). The taxes comprised of the below;
- Provision of Edu. Tax: N182.09mn (H1 2020: N93.59mn)
- Income Tax: N2.73bn (H1 2020: N1.40bn)
OKOMU posted a Profit of N9.53bn on continuing operation after tax. This represents a 137.98% growth when compared with the N4.00bn posted in H1 2020. Earnings Per Share (EPS) also grew by 138.10% from N4.20 to N10.00.
Analysis of Statement of Financial Position (Balance Sheet)
The Company’s balance sheet as reported was lean, with only few items on both the Assets, Liabilities, and Shareholder Equity columns.
The Asset column shows that Bank and Cash improved from N4.56bn to N8.04bn, while the Total Assets grew by 9.43%, from N55.01bn on the books on 31 December 2020 to N60.19bn on 30 June 2021.
On the Liabilities column, the company’s Long Term Loans remained on the same range, standing at N10.77bn, against N10.94bn on 31 December, 2020. The Total Liabilities increased by 10.40% from N22.38bn to N24.70bn.
The Total Shareholders Equity also grew from N34.77bn to N37.83bn. The company’s revenue reserves accounts for most of the Shareholders Equity, this reserve was N35.49bn on 30 June 2021 (30 December 2020: N32.63bn).
Analysis of Statement of Cash Flows
A review of the company’s statement of cash flows shows the below;
- Net cash generated from operating activities stood at N13.69bn
- Net cash used in investing activities stood at N3.26bn
- Net cash used in financing activities stood at N6.95bn
The cash and cash equivalent as at 30 June stood at N8.04 billion.
About the Company
The Okomu Oil Palm Company Plc was incorporated on December 3, 1979 as a private limited liability company. It was converted to a Public Limited Company (PLC) on September 19, 1997 under the Company and Allied Matters Act, 1990.
It is a member of Socfinal group of Luxemburg which owns 62.94% in the Company’s shares with Nigerians owning the balance of 37.06%.
The Principal activities of the company are the development of oil palm plantation, palm, oil milling, palm kernel processing and the development of rubber plantation.
The Okomu Oil Palm Plc (OKOMUOIL) has 953.91 million outstanding shares and a market capitalization of N104.93bn.
At the end of trading on Friday 6th August, 2021, its share price stood at N110.00. The 52 week high price of the shares is N116.50 and the 52 week low price is N75.00
The share price is up by 205.56% over the past 5 years, up 111.54% over the last 2 years and up by 20.88% YTD.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur
