Presco Grows Profit by 158% to N39 Billion
Producer of specialty fats and oils, Presco Plc, net profit rose by about 158% year on year to N39 billion, the company’s unaudited financial statement posted on the Nigerian Exchange has shown.
The agro allied company reported an impressive 83.1% year on year revenue growth, which settled at N88.02 billion from N48.07 billion in the first half of 2023.
The significant growth in H1 revenue was primarily driven by increased local demand for crude palm oil (CPO) for both industrial and household uses, according to CSL Stockbrokers Limited.
Analysts noted that Presco experienced higher sales of CPO, mill by-products, and Fresh Fruit Bunches (FFB), coupled with upward price adjustments.
They noted that the global price of CPO rose by 6.2% to US$845 per ton during the first half of 2024, contributing to the Revenue growth.
While its topline popped higher, there was noticeable decline in sales costs in the period, helping to lift the bottom line higher above some analysts’ projections for the period.
Presco Plc profit margin strengthened despite tough economic environment as costs of sales grew slower than revenue. The cost of sales surged 38.6% year on year to N22.43 billion, up from N16.18 billion in H1 2023.
The agro allied company’s gross profit rose by105.7% to N65.59 billion from N31.89 billion in the comparable period in 2023. The company’s gross margin improved to 74.5% in H1 2024, up from 66.3% in H1 2023.
Analysts said, despite an increase in operating expenses due to a high-cost business environment, Presco Plc earnings before interest tax depreciation and amortisation (EBITDA) margin, which increased by 11.7 percentage points to 57.7%.
Operating expenses of the agro allied company rose by 51.1% year on year to N14.8 billion, up from N9.8 billion in the comparable period in financial year 2023.
Overall, the company reported an operating profit of N50.79 billion in the first half of 2024, a significant 130% year on year increase.
Its unaudited financial statement showed that finance income rose to N382 million in H1 2024 from N8.62 million in H1 2023. This increase was primarily driven by higher interest earnings on the company’s fixed deposit balances, according to CSL Stockbrokers.
Meanwhile, finance costs, which include interest expenses on loans and overdrafts, increased by 8.9% year on year to N4.42 billion, up from N4.06 billion in the same period last year.
The company also reported a foreign exchange (FX) gain of N3.68 billion for the first half of 2024, compared to an FX gain of N2.86 billion in H1 2023. Overall, the business reported N38.88 billion in net profit, up 157.8% year on year from N15.083 billion 12 months earlier. NNPCL Orders to Sell Crude Oil to Dangote, Other Refineries in Naira
