34% Profit Increase in 2022: Okomu Palm Oil Plc Outlines 2023 Expansion & Procurement Plans

Published On: June 21, 2023Company: Okomu Palm Oil Plc (OKOMUO.ng)
What measures are in place to procure more smallholder FFB and rubber cup lumps in 2023?
Okomu Palm Oil Plc is aiming for a purchase of 10,000t of FFB from the local smallholder farmers surrounding both Okomu main estate and Extension 2, while also signing agreements with non-governmental organizations with the intention of developing more smallholder programmes. Additionally, emphasis will be placed on the procurement of more smallholder FFB and rubber cup lumps in 2023.

The Operating & Economic Environment for 2022

  • Global economic activity experienced a significant decline
  • Global inflation higher than in several decades
  • Global economy severely impacted by tightening financial conditions and rising interest rates
  • Nigerian economy experienced growth, but saw higher inflation and lower official reserves and currency market skewing
  • Okomu Palm Oil Plc utilized fully commissioned 5mw turbine as power source to reduce costs and carbon footprint

Operating Results

  • Okomu Palm Oil Plc Total Comprehensive Income for 2022 of N16 billion, 34% higher than in 2021
  • Higher CPO prices (43% YoY increase) and rubber prices (7% YoY increase) drove increase in income
  • CPO production higher (16% YoY increase), while rubber production lower (12% YoY decrease)
  • Turnover higher by 58%, while direct costs increased by 64%, YoY

Dividends

  • Proposed final dividend of N12.00 per share, in addition to N9.00 interim dividend, N21.00 total dividend per share for 2022
  • Subject to withholding tax at applicable rate

Operational Performance by Sector

  • Palm: 19,060ha mature plantation, no immature plantings or replantings; agricultural palm plantation costs up 39%; total FFB production higher by 11% YoY, 12.97 t/ha
  • CPO sales and turnover up 18% and 69.6%, YoY; revenue for all palm products up 69%, YoY
  • Rubber: 6,025ha mature plantation, no new plantings or replants; dry rubber production down 8.96% YoY; rubber agricultural plantation costs up 88% YoY

Consolidated Financial Results

  • Gross earnings of N59.32 billion, 59% higher than 2021
  • Earnings before tax (EBT) up 46% YoY
  • Tax up 59% YoY
  • Net profit for 2022, of N16 billion, 41% higher than 2021

Corporate Social Responsibility

  • CSR programme for neighbouring communities continued in 2022; disbursements to local communities/govts up N376 million, YoY
  • Challenges encountered in security and smallholder farmer schemes; companies and NGOs aim to develop more smallholder programmes

Future Expansion & Development Plans for 2023

  • Utilization of two oil mills in Extension 2 to improve productivity
  • 1,700 hectares in Extension 1 to be planted with palm or rubber trees, pending environmental and social impact assessment
  • Procurement of more smallholder FFB and rubber cup lumps

Useful links

About Okomu Palm Oil Plc (OKOMUO.ng)

Okomu Palm Oil Plc manufacture and market Banga Palm Oil in Nigeria and a range of Noko 10 rubber bands. The company was established in 1976 as a Federal Government pilot project set up to rehabilitate oil palm production in Nigeria. At the time, the pilot project incorporated 15 589 hectares of which 12 500 hectares were planted with oil palms. In 1985, Okomu Palm Oil Plc installed a 1.5 tonne fresh fruit bunches/hour mill. The company was privatised in 1990 and has grown to become Nigeria’s leading oil palm company, with some 14 000 hectares of land currently planted with palm oil trees and 8 000 hectares of rubber trees. By 2020, an additional 4 000 hectares of palm oil trees and 1 500 hectares of rubber trees will have been planted on the 33 000 hectares of private land owned by Okomu Palm Oil Plc. The company operates two 30-tonne/per hour oil mills, and an additional two 30-tonne/per hour mills will be operational by 2020/21. Its technical partner, SOCFINAF (Luxemburg), has a 53.32% stake in the business. SOCFINAF (Luxemburg) was founded in 1912 and was the first industrial company to plant oil palm trees in Africa and Indonesia. Today, it has plantations and oil palm operations in Sierra Leone, Ghana, Cote D’Ivoire, Liberia, Nigeria, Cameroon, the DRC, Sao Time and Cambodia. Okomu Oil Palm Plc’s head office is in Lagos, Nigeria. Okomu Palm Oil Plc is listed on the Nigerian Stock Exchange

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