Drop in Local Sales Shrinks Okomu Oil’s Q3 Turnover, Profit

By Adedapo Adesanya

Okomu Oil Palm Company Plc has released its interim financial statements for the nine months ended September 30, 2019, but performance of the Edo State-based firm was not impressive as there was a slight decline in the profit after tax (PAT) and the turnover when compared with the same period of 2018.

The Q3 results of the palm oil producing company were not too different from what was achieved in the first half of this year as earlier reported by Business Post when they were released then.

The company said its revenue as at September 2019 stood at N15.5 billion compared with N16.7 billion 12 months ago, indicating a shortfall of N1.2 billion or 7.2 percent. This occurred as a result of a 10.3 percent drop in local sales, which closed at N13.1 billion in contrast to N14.6 billion recorded in the same period last year. However, the firm saw an increase in its export sales by 22.6 percent, rising to N2.5 billion from N2.04 billion.

There was also a drop in the cost of sales by the company in the period under review as this marginally went down to N2.2 billion against N2.3 billion in September 2018, just like its net operating expenses increased by over 30 percent to N7.4 billion from N5.6 billion.

The company’s finance income rose to N381.3 million in the first nine months of this year compared with last year’s N307.6 billion, while the finance cost was pruned toN215.0 million from N332.2 million.

It also declared a decline in the gross profit in the considered time, closing at N13.3 billion in September 2019 against N14.4 billion in September 2018.

Despite recording a lower revenue and gross profit in Q3 2019, Okomu Oil paid a higher tax than the previous comparative period in 2018. In the results, the firm said it paid to government the sum of N1.98 billion in taxes in the period under review, higher than N1.48 billion in the same period of last year.

This was because of the N1.894 billion paid as income tax in Q3 2019 against the N1.296 billion paid in Q3 2018. The firm said it paid N93.3 million as education tax this year versus N181.8 million last year.

During the period under consideration, Okomu Oil said in its earnings that its profit before tax dropped to N6.1 billion from N8.7 billion, while the profit after tax went down to N4.1 billion from N7.2 billion. In the financial statements, the earnings per share went down to N4.31 in Q3 2019 from N7.59 in Q3 2018.

Okomu Oil said it closed September 30, 2019 with a total net assets of N29.8 billion compared with N28.5 billion as at September 30, 2018. These assets comprise a share capital of N477.0 million (N477.0 million as at December 2018), N1.9 billion share premium account (same as at December 2018) and revenue reserves of N27.4 billion (N26.2 billion as at December 2018).