Presco Plc, Nigeria’s largest palm oil producer reported that revenue in the nine months period to September 30, rose 0.74% to N276.54 billion.
Meristem Securities said in an earnings flash that softer domestic palm oil prices offset higher global prices, as rising imports kept local prices down.
Revenue from crude and refined products fell 1.5% to N270.20 billion. Sales of fresh fruit bunches, the raw palm fruit, rose 24.8% to N6.21 billion.
Pretax profit rose 8.5% to N151.48 billion, however profit after tax for the period rose just 0.35% to N111.18 billion, from N110.79 billion a year earlier.
Tax expense increased 39.6% to N40.30 billion, lifting the effective tax rate to 26.6% from 20.7%. The extra N11.43 billion in tax took up 97% of the N11.83 billion rise in pretax profit, on MoneyCentral calculations.
Presco Revenue by Geography
The geographic split shows two different trends. Nigerian revenue rose 12.7% to N222.02 billion. Revenue from Ghana, where Presco owns Ghana Oil Palm Development Co., fell 21.6% to N54.53 billion. The company recorded no revenue in Germany, against N7.91 billion a year earlier.
Costs also rose faster than revenue. Cost of sales increased 1.8% to N73.72 billion, and gross margin narrowed to 73.34% from 73.62%.
Administrative and distribution expenses rose 20.3% to N52.26 billion, on MoneyCentral calculations. Operating profit fell 5.3% to N157.16 billion, and operating margin narrowed to 56.83% from 60.46%, according to Meristem.
Presco shares are up 26.9% year-to-date, underperforming the broad market NGX Index which has risen by 63.72% in the same time period.
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