Okomu Oil Palm Plc has recorded a strong first-quarter performance in 2025, posting an after-tax profit of N18.06 billion, a 71 percent increase from N10.56 billion in the same period of 2024.
The boost came on the back of higher revenue, improved operating efficiency, and gains from foreign exchange revaluation.
The company’s revenue rose by 58.9 percent to N34.15 billion, up from N21.49 billion in Q1 2024, reflecting the favourable pricing environment for palm oil and rubber products, as well as a weaker naira which supported export earnings.
This result highlights the continued strength of Nigeria’s agro-industrial sector despite macroeconomic pressures.
Margins hold steady amid rising costs
Okomu’s gross profit rose 66.5 percent to N27.53 billion in the first three months of the year, with a gross margin of 80.6 percent, a slight improvement over the 76.9 percent margin recorded in Q1 2024.
Operating profit also climbed by 68.3 percent to N25.05 billion, aided by cost discipline and economies of scale in plantation and mill operations.
Profit before tax grew by 68.7 percent year-on-year to N28.34 billion, buoyed by a net foreign exchange gain of N3.29 billion, compared with N2.57 billion a year earlier. This illustrates how FX revaluations continue to play a crucial role in earnings for agric-export-facing firms.
Earnings per share (EPS) also improved significantly to N18.97, up from N11.11, positioning the company to offer higher returns to shareholders if this earnings trajectory continues.
Read also: Okomu Oil announces change in shareholders’ dividends payout date
Charting strong fundamentals
Key financial indicators paint a picture of a business expanding solidly on both revenue and profitability fronts. The company’s total assets grew by 19.5 percent to N170.8 billion, up from N142.9 billion in December 2024. This includes a notable increase in inventories and biological assets, underscoring increased production activity and anticipated yields.
At the same time, Okomu Oil kept its liabilities in check, recording only a 4.4 percent increase to N40.5 billion. As a result, shareholders’ equity rose to N130.3 billion, a 25.1 percent growth in just three months. This balance sheet strength enhances investor confidence in the company’s long-term sustainability.
A play on exports and pricing power
With palm oil prices elevated globally and the naira still adjusting under market forces, Okomu continues to benefit from dual exposure to local and international markets.
The company’s ability to convert agricultural output into hard currency earnings positions it as a hedge against currency volatility, a key attraction for investors in 2025.
Agribusiness analysts say the company’s performance demonstrates the resilience of Nigeria’s plantation-based producers amid supply-side inflation, rising logistics costs, and FX illiquidity in some sectors.
“Okomu is riding both export upside and local demand tailwinds. The efficient cost structure and low debt profile are key differentiators,” said a Lagos-based equity analyst.
Outlook remains strong
Looking ahead, investors will be watching seasonal patterns, FX market reforms, and policy support for the agricultural sector to determine earnings sustainability.
With Q1 typically a strong period due to high harvest yields, subsequent quarters may moderate. However, Okomu’s strong start sets the stage for another record year if current trends hold.
Dividend-paying potential remains solid, especially with earnings per share nearing N19 already in Q1. If reinvestment needs remain balanced, shareholders can anticipate improved returns in 2025.
