95% Increase in Dividend: Benso Oil Palm Plantation Limited Thrives amid Uncertainty in Ghana’s Economic Environment

Published On: June 21, 2023Company: Benso Oil Palm Plantation Limited (BOPP.gh)

Looking at the long-term economic forecast for Ghana, what strategies can businesses use to build resilience in an uncertain environment?: Businesses can build resilience in reaction to an uncertain environment by investing in modern technology and techniques to improve their operational efficiency, managing costs prudently, engaging in long-term financial planning, supporting the local community, and diversifying their operations as a hedge against economic limitations. Additionally, businesses should use external resources and industry monitoring to gain insight on the macro-economic outlook and adjust accordingly.

Ghana’s Macro-Economic Environment

Inflation remained elevated throughout 2022, driven by a combination of demand and supply pressures.
Real GDP growth moderated to 3.6% in 2022, driven by the services and agriculture sector.
The banking sector performance moderated due to rising cost of credit and revaluation-driven balance sheet performance.
Global commodity prices, such as crude oil and gold, experienced volatility during the year.
The world market price of Crude Palm Oil (CPO) grew 20% in dollar terms, while Palm Kernel Oil (PKO) decreased 20%.

Financial and Operating Performance

Revenue growth of 59% YoY and profit after tax of 73.6% YoY.
Total Palm Fruits processed during the year 124,769 metric tons, 15% below prior year (2021).
The Company purchased 48,807 metric tons of Fresh Fruit Bunches at a total cost of GH¢53million from Smallholders and Out-grower farmers in surrounding communities.

Dividend

Recommendation of a final dividend of GH¢0.9435 per share, in addition to an interim dividend of GH¢1.1308.
Cumulatively accounting for 45% of profit after tax and a 95% increase over 2021.

Social Responsibility

Four major pillars of focus for Company’s CSR Policy: Education, Health, Social Infrastructure and Economic Empowerment/Wealth Creation.
A total amount of GH¢1.6 million was spent on CSR in 2022.
Tertiary Scholarship granted to five (5) brilliant but needy Students from the surrounding communities.
BOPP spent a total of GH¢53 million on its Smallholder and Outgrower operations in the catchment area.

Awards

Retained RSPO certification status.
Ranked number 20 in the Ghana Club 100 awards.

Outlook 2023

IMF report that 2023 is expected to be “tougher” than 2022 due to slow-down in US, EU and China’s economies.
Domestic economic conditions are expected to remain below potential over the near-term.
Government of Ghana reached SLA with the IMF to put the economy on the path of fiscal consolidation.
The 2023 Budget was passed by Parliament and frontloads the consolidation efforts with revenue enhanced measures.
Significant challenges ahead for businesses in the current economic dispensation.

Useful links

About Benso Oil Palm Plantation Limited (BOPP.gh)

Benso Oil Palm Plantation Limited is a leading agribusiness based in the heart of Ghana’s oil palm industry. As one of the oldest agricultural firms listed on the Ghana Stock Exchange, Benso has established itself as a reliable source of high-quality palm oil products. The company’s state-of-the-art plantations and projects have led to sustained growth and profitability in recent years. Benso also has a vertically integrated processing facility that provides end-to-end service and the highest product quality on the market. With products marketed worldwide, Benso is unrecognized as the West African leader in quality, productivity, and sustainability. The company has set an example for how agribusiness can drive social and economic progress in regions traditionally considered less developed.

Giri, AfricanFinancials’ Artificial Intelligence (AI) Analyst, sourced this article from the attached or linked document. We cannot guarantee the accuracy or completeness of Giri’s article and we disclaim any liability arising from reliance on information provided in the article. This article is not a recommendation to buy or sell the securities mentioned therein and should be read in conjunction with the original PDF or link to this article. Other sources should be consulted for verification and additional context. Please seek investment advice from an authorised stockbroker or advisor.

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