Presco Plc reported a 7.3% year-on-year decline in net profit for the first half of 2026, as sharp revenue contraction in its Ghanaian operations and higher operational overheads offset double-digit growth in its core Nigerian market.
Profit after tax fell to ₦82.3 billion for the six months through June 30, down from the prior-year period. Earnings Per Share (EPS) dropped at a steeper rate of 20.5% year-on-year to ₦70.52, impacted by an expansion in the weighted average number of outstanding shares following recent capital updates.
Despite the earnings moderation, the board of directors proposed an interim dividend of ₦10.00 per share, representing a payout ratio of 14.2% based on H1 2026 earnings.
Geographic Divergence and Operational Pressures
Group revenue came in flat at ₦198.8 billion as performance split sharply across geographic territories:
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Nigerian Market: Domestic sales rose 12.4% year-on-year, backed by steady demand for refined palm oil and industrial crude palm oil (CPO) products.
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Ghanaian Market: Revenue dropped 34.7% year-on-year to ₦34.1 billion, severely curbing overall top-line expansion.
Operating expenses (OPEX) rose 16.5% to ₦42.8 billion, driven by a 74.4% surge in selling and distribution expenses and a 14.5% rise in staff costs. Higher production and depreciation expenses widened the cost of sales by 5.5% to ₦32.9 billion, trimming gross margins to 83.4%.
While miscellaneous operating income rose 57.9% to ₦5.1 billion, Operating Profit (EBIT) margin compressed by 1.7 percentage points to 63.6%.
Balance Sheet Deleveraging and Q2 Weakness
A key positive contribution during the half-year period came from the company’s financial structure. Net finance costs fell 76.3% year-on-year to ₦4.3 billion, driven by a 31.9% reduction in borrowing costs as management aggressively paid down debt. Finance income grew nearly sixfold (+482.2%) due to higher yield generation on cash balances held in fixed deposits.
However, a higher effective tax rate—jumping 12.0 percentage points to 32.7%—erased finance cost savings and dragged net profit margins down to 41.4%.
The half-year softness was primarily concentrated in the second quarter. Standalone Q2 revenue fell 6.7% year-on-year, while quarterly PAT dropped 19.8% under weight from cost pressures and tax charges, leading to an EPS decline of 31.2% to ₦28.30 for the three-month period.
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