Okomu Oil just announced a 30 percent year on year (YoY) growth in earnings to N2 billion in its second quarter (Q2) 2020 unaudited results.
The company’s strong start to the year may have been aided by the impact of sustained land border closures amid the ongoing pandemic, analysts say.
Okomu Oil reported a 50.6 percent jump in revenues to N6.5 billion in the quarter, following a 67.9 percent increase in local sales which offset weakness in export revenue which was down -35.3 percent.
“Growth in domestic revenue likely reflected the impact of greater harvesting from current and previous year’s planted areas. Elsewhere, the weaker export sales may have tracked lower global demand for rubber,” analysts at cardinal Stone Partners said.
Gross profit margin advanced by 6.9 percentage points to 87.3 percent in Q2’20.
As at half year, gross profit margin stood at 92 percent and largely reflected cost improvements in Q1’20.
The cost improvements cut across both oil palm and rubber segments.
Cash generated from operations soared to N5.4 billion in the half year 2020 period, from N662 million in the corresponding period of 2019, aided by a surge in cash receipt from customers.
Finance cost however rose by 416.3 percent to N115 million due to new long term borrowing obtained last year for business expansion.
Okomu Oil shares closed trading at N70.50 yesterday. The stock is up 40 percent in the past year.